Published in The Australian (Sydney), 22 January 2009

WHAT makes a good Constitution? If your expectations are low you might go with the Polish aphorist Stanislaw Jerzy Lec who once said that a good Constitution should not ruin the constitution of the citizens. The more ambitious may prefer former French president Charles de Gaulle’s advice that a Constitution has to be “made of a spirit, institutions, and a practice”.

Judged by this standard, Australia’s Constitution certainly does not lack spirit. But between its institutions and practice lies a gap, and nowhere is this more evident than in the area of local government. While local government in Australia is clearly established as the third tier of the state, the Australian Constitution does not recognise it. At the constitutional level, local government is something of a phantom. Although its presence may be felt at times, it is still hard to grasp it.

This lack of recognition has not stopped successive commonwealth governments from trying to deal with local government authorities directly. Only last November, the Prime Minister showered each and every one of the country’s towns and cities with a total of $300million in an effort to stimulate the economy through spending on town hall repairs and the like. What really needs repairing, though, is the Australian Constitution.

More than a century after federation, it is time to reflect on the reality of a three-tier system of government. But to make the task of constitutional recognition worthwhile, we should also seize the opportunity to redefine the role of local government in Australia. If recognition of local government only meant cementing the status quo, it would be an opportunity wasted.

A comparison between Australia and other federal countries is instructive. Australia has about 700 local government bodies for its population of 21 million, or on average one council for every 30,000 inhabitants. The corresponding figure for the US is 3500 people per local government unit. In Germany, the average number of people per local government is just 6600, while in Switzerland there is an average of 2800 people per council. Clearly, Australia’s local government areas are already large by international standards, but the process of amalgamations will make them still bigger in the future. Unfortunately, the larger local government units are, the more removed they become from the people they are supposed to serve.

While Australia’s local government units are big in size, they are nevertheless relatively weak. Although Australian councils have taken on many more tasks beyond the traditional three R’s of rates, roads and rubbish, they are still far behind their counterparts in other developed countries. In other three-tier systems of government, police forces, fire departments and even schools are managed locally. In Australia, on the other hand, there has been a strong centralising tendency in nearly every aspect of public life.

Being too remote and relatively limited in scope are not the only problems of local government in Australia. Apart from a clear definition of its tasks, it also lacks a strong and secure source of funding that would make it less reliant on grants from the states and the commonwealth. For about a third of their expenditure, Australia’s local governments now depend on money they receive from higher tiers of government.

Not being recognised in the Constitution, therefore, is clearly not the only problem for Australia’s local government. It may not even be the most important. The more pressing issues are its institutional and fiscal weakness, which leaves councils at the mercy of their state governments.

This is a deplorable situation for local government representatives, but it is much more than that. It is an issue for all of us who desire good quality and cost-effective public services. It is an issue for all us who believe in a government “of the people, by the people, for the people”, to quote Abraham Lincoln. Nowhere can you be closer to the people than at the local level.

Maybe not all politics is local, but making more of it local would also mean making politicians more accountable to their voters. More localism would also encourage competition and creativity in the delivery of public services. Why can’t we trust local communities to make their own choices when it comes to policing their neighbourhoods or running their schools? Why are we always looking to our state capitals or even to Canberra when we demand better public services?

A country the size of Australia could be better served if it tried to delegate more tasks to lower tiers of government. Federalism is one way of achieving this, and many have cogently argued that it should be strengthened. Yet the very same arguments in favour of federalism also apply to local government.

Instead of one-size-fits-all solutions councils could create large numbers of tailor-made schemes. Strengthening local government would therefore encourage competition and creativity in providing public services. Councils could choose different ways to provide for waste management and experiment with new traffic management schemes for their roads. Councils could learn from each other’s experiences. Processes of innovation and imitation that work so well in product markets could be introduced into the public sector.

The Rudd Government is consulting on ways to finally recognise local government in the Constitution, but it should not stop there. Local government needs more than elegant constitutional prose. It deserves a clear purpose, well-defined responsibilities, and greater fiscal autonomy.

Oliver Hartwich is a researcher at the Centre for Independent Studies, his paper Beyond Symbolism: Finding a Place for Local Government in Australia’s Constitution was released by CIS on Thursday.