Two High Court decisions known as the Pape Case and the Williams Case – delivered in the space of three years – have handed down judgements that challenge the Commonwealth’s ability to fund activities that it believes are in the national interest. These decisions have important ramifications for local government as both cases have rejected the Commonwealth’s position that it has the capacity to spend money on whatever subject it wishes, for example continued funding for programs like Roads to Recovery.
Legal advice from leading authorities confirms that these High Court decisions have created great uncertainty about the validity of Commonwealth programs that provide funds directly to local government. Such programs, including the $3.5 billion Roads to Recovery program, may be vulnerable to further challenge in the High Court. This threatens the financial sustainability of councils and the wellbeing of communities across Australia and could mean reducing or discontinuing vital services to local communities.
These High Court decisions have provided weight and urgency to the need for a change to the Constitution to allow direct federal funding of local government—what is known as financial recognition. The purpose of amending the Constitution would be to resolve the uncertainty surrounding the Commonwealth’s ability to continue to provide direct funding.
Legal certainty is required to ensure that your local services can be maintained and that your taxes are spent locally by councils to maintain local roads, infrastructure, services and facilities.