South Australian Local Government Grants Commission Act 1992

The central concept is the Commission, which section 8 continues in existence. It consists of three members: a presiding member jointly nominated by the Minister and the Local Government Association of South Australia, a member nominated by the Minister, and a member nominated by the Local Government Association (section 8(2)). Members are appointed by the Governor for terms up to five years and are eligible for reappointment (section 9(1)). The Commission has a quorum of two, each member has one vote, and the presiding member has a casting vote on equality (section 11(2)-(3)). Decisions are taken by majority of votes cast (section 11(4)). The Act creates the Account, continued under section 5(1). It is a dedicated fund held at Treasury, comprised of Commonwealth funds, state appropriations, investment income, and other receipts. The Account can be drawn on for grants to councils and for the Commission’s administrative costs. The term Commonwealth funds means any amount received under the Commonwealth Local Government (Financial Assistance) Act 1986 in respect of allocations approved under that Act (section 4). The Commonwealth Act is defined as that 1986 Act as amended from time to time, including any substituted Act (section 4). This means the state Act is tied to the federal legislative framework and automatically incorporates changes to it. A council is defined as a council under the Local Government Act 1934, and includes any person or body prescribed as a council for the purposes of this Act, but excludes a body exercising powers within a council’s area as defined under the Local Government Act 1934 (section 4). This definition is broad enough to capture other entities if prescribed. A grant is a grant payable under this Act (section 4). Available moneys is the total amount the Minister specifies under section 6 after consultation with the Commission. That sum forms the constraint within which the Commission must work when making recommendations. The concept of principles formulated by the State for the purposes of the Commonwealth Act (section 17(1)(b)) is not further defined in this Act, but ties the state allocation methodology to whatever principles are adopted under Commonwealth law. The Act also introduces special needs of a council as a permissible factor in the Commission’s recommendation (section 17(2)), though the Act does not define what constitutes a special need, leaving discretion to the Commission.

The Act directly affects every local government council in South Australia, as defined by the Local Government Act 1934 or prescribed by regulation. Each council is subject to information-gathering powers under section 19. The Commission may require councils to provide information about their affairs in a specified form and within a specified time. Failure to comply can result in the Commission declining to recommend a grant to that council for the relevant financial year (section 19(3)). This creates a direct financial exposure for councils that do not cooperate. The three members of the Commission are directly affected by the appointment, tenure, and removal provisions (sections 8, 9). They are also personally liable under section 13 for misuse of confidential information, carrying a penalty of up to two years imprisonment or a fine of $8,000 (Division 5, per the Appendix). The Minister for Local Government is the key political actor: the Minister must specify available moneys (section 6), receive recommendations, decide whether to approve or refer them back (section 18), table the Commission’s annual report in Parliament (section 21), and provide statements to the Commonwealth Treasurer (section 22). The Local Government Association of South Australia has nomination rights for two of the three Commission positions (section 8(2)(a) and (c)), giving it a direct role in the composition of the recommending body. The Treasurer is involved through investment of Account moneys (section 5(4)) and receipt of statements from the Minister (section 22). The Governor appoints members and deputies, sets conditions of appointment, and may remove members on specified grounds (sections 8, 9). Staff of the Commission, who are public servants, are affected by the Commission’s use of departmental services (section 14). Broadly, all South Australian ratepayers and state taxpayers are indirectly affected, because the Act governs the distribution of Commonwealth financial assistance - a pool of money that reduces the burden on local ratepayers - and because the Account can be used for administrative costs (section 5(3)(b)), which may reduce the amount available for distribution.

The Commission’s core duty is to formulate recommendations to the Minister on grant amounts, following the mandatory criteria in section 17: total recommended must match the specified available moneys; allocation must accord with state principles under the Commonwealth Act; and the Commission must comply with any relevant provision of the Commonwealth Act. The Commission may consider a council’s special needs, but is not required to. The Commission must forward its recommendation as soon as practicable after completion (section 17(3)). When the Minister refers a recommendation back with reasons, the Commission must reconsider and make amendments as it thinks necessary or desirable, then resubmit (section 18(3)-(4)). The Commission must cause minutes of its proceedings to be kept (section 11(5)). It must, on or before 30 September each year, report to the Minister on its activities during the previous financial year (section 21(1)). The Minister must cause the report to be laid before each House of Parliament within 12 sitting days (section 21(2)). The Minister’s duty is to specify the total available moneys under section 6, after consultation with the Commission, and to publish that specification in the Gazette. The Minister may approve a recommendation or refer it back, but on resubmission must approve it (section 18). The Minister must also, as soon as practicable after the end of the financial year, provide the Commonwealth Treasurer with a statement of payments made and an Auditor-General’s certificate (section 22). The Commission has the right to hold inquiries and investigations (section 16), including exercising powers equivalent to a royal commission (summons, compulsion of evidence). It may require councils to provide information in writing under section 19(1) and (2). The Commission may invest money in the Account not immediately required, after consultation with the Treasurer (section 5(4)). Councils have a right to be heard? Not expressly, but the Commission’s inquiry powers under the Royal Commissions Act 1917 include procedural fairness obligations inherited from that Act. Councils also have the right to be nominated? No. But they have the right to receive grants only if they comply with information requests (section 19(3) conditions the Commission’s obligation to recommend). There is no right to a grant or to a minimum amount. Members of the Commission have the right to remuneration determined by the Governor (section 10), and to reappointment. A deputy may act in the member’s absence (section 9(2)). The Governor may remove a member on specified grounds (section 9(4)). A member must not use confidential information for private benefit (section 13). The Local Government Association has the right to request the Minister to refer matters relating to local government finance to the Commission for inquiry and report (section 20(1)).

The only penalty provision in the Act is section 13: a member of the Commission must not use confidential information gained by virtue of the member’s official position for the purpose of securing a private benefit for the member personally or for some other person. The penalty is a Division 5 fine or Division 5 imprisonment. The Appendix provides that Division 5 carries a maximum imprisonment of 2 years and a maximum fine of $8,000. There is no expiation fee listed for Division 5, meaning the offence is not expiable and must be prosecuted in court. Enforcement of this provision would be through the ordinary criminal process, presumably by the police or the Director of Public Prosecutions. The Act does not create any other criminal offences. No infringement notice scheme applies to section 13. The other enforcement mechanism is administrative: under section 19(3), if a council fails to comply with a requirement to provide information under subsection (1) or (2) in relation to a financial year, the Commission “is not bound to make a recommendation as to the payment of a grant to that council.” This is a conditional withholding of the Commission’s statutory function. It does not impose a fine or penalty, but it can remove the council from the grant allocation process for that year, which is a severe financial consequence. The Commission retains discretion: it “is not bound”, meaning it could still recommend a grant even after a failure, but it is not obliged to. The Act does not provide for any appeal or merits review of a decision not to recommend a grant. Section 18 provides that once the Commission resubmits its recommendation after a ministerial referral back, the Minister must approve it. This limits the Minister’s ability to block a grant after the process is exhausted. There is no civil penalty regime. The general law of judicial review for jurisdictional error would apply to decisions of the Commission and the Minister, but the Act does not create any specific review rights. Section 12(1) provides that an act or proceeding of the Commission is not invalid by reason only of a vacancy in its membership or a defect in the appointment of a member. This provision insulates Commission decisions from technical challenges but does not bar review on substantive grounds. The Governor may remove a member under section 9(4) for breach of conditions, incapacity, neglect of duty, dishonourable conduct, or absence from three consecutive meetings without leave. That is an internal enforcement mechanism for member conduct.

The Act is explicitly subordinate to and interlocked with the Local Government (Financial Assistance) Act 1986 of the Commonwealth (the “Commonwealth Act”). Section 4 defines the Commonwealth Act as that Act as amended and in force, including any substituted Act. Section 17(1)(b) and (c) require the Commission to ensure its recommended allocation accords with principles formulated by the State for the purposes of the Commonwealth Act and to comply with any relevant provision of the Commonwealth Act. This means changes to the Commonwealth Act automatically affect the state grant process without requiring amendment of this Act. The Account receives “amounts received from the Government of the Commonwealth for the purposes of this Act” (section 5(2)(a)), and payments from the Account must be made in accordance with any relevant approval obtained under the Commonwealth Act (section 7). The statement to the Commonwealth Treasurer (section 22) fulfils the state’s reporting obligations under the Commonwealth Act. For inquiries, section 16(2) gives the Commission the powers of a commission as defined in the Royal Commissions Act 1917. That Act applies as if the Commission were a royal commission and the inquiry’s subject matter were set out in a commission of inquiry issued by the Governor. This imports compulsory evidence and document production powers, penalties for non-attendance or contempt, and protections for witnesses. The Commission may also inquire in any other manner it sees fit (section 16(3)). The definition of “council” in section 4 refers to the Local Government Act 1934. That Act defines the councils to which grants may be paid, but the definition allows prescription of other persons or bodies, creating potential interaction with acts that establish equivalent bodies. The Commission’s staff are comprised of persons employed in the Public Service of the State (section 14(1)), so the Public Sector Act 2009 and related legislation govern their employment. The Commission may also use services, facilities, or employees of government departments, agencies, or instrumentalities by arrangement (section 14(2)). The penalties in section 13 are expressed by reference to “Division 5” which is defined by the Acts Interpretation Act 1915 (section 28A). The Appendix reproduces the relevant divisions for convenience, but the operative source is the Acts Interpretation Act. The transitional provision (section 24) preserved the membership of the Commission as it existed immediately before commencement of the Act, overriding any automatic vacation of office. The regulation-making power in section 23 allows the Governor to make regulations necessary or expedient for the purposes of the Act, which could create further requirements that interact with other laws, subject to the Subordinate Legislation Act 1978. The Act does not interact with any taxation laws, though grants to councils may affect council budgets and rates. There is no express interaction with the Local Government Act 1999 (replacing the 1934 Act), but functionally councils operate under that Act.

The South Australian Local Government Grants Commission Act 1992 (Act No. 30 of 1992) received assent on 21 May 1992 and commenced on 4 June 1992 (Gazette 4 June 1992 p1598). It repealed the South Australian Local Government Grants Commission Act 1976. The principal Act has been amended by three subsequent Acts. The Statutes Amendment (Public Sector Consequential Amendments) Act 2009 (No. 84 of 2009), Part 139 (section 318), commenced on 1 February 2010. It deleted subsections 12(2) and (3). Those subsections are not present in the current text; they likely concerned the effect of vacancies or defects on acts of the Commission. The long title was also amended under the Legislation Revision and Publication Act 2002 as part of ongoing legislative revision (effective 1 February 2010). Sections 2 and 3 of the original Act were omitted under the same revision program. The Local Government (Boundary Adjustment) Amendment Act 2017 (No. 32 of 2017), Schedule 1, clauses 1-3, commenced on 1 January 2019. It amended section 5(2) and (3) (the composition and application of the Account), section 14(1) (staff), and section 15(1) (functions of the Commission). The specific nature of these amendments is not detailed in the source beyond the provisions varied. The Statutes Amendment (Local Government Review) Act 2021 (No. 26 of 2021), Part 10 (section 207), commenced on 20 September 2021. It amended section 19(3). The subsection now provides that subject to any relevant provision of the Commonwealth Act or an instrument under that Act, a council’s failure to comply with an information request means the Commission is not bound to make a recommendation as to payment of a grant to that council. The amendment appears to have added the qualification “Subject to any relevant provision of the Commonwealth Act or an instrument under that Act,” giving primacy to Commonwealth requirements. No other provisions have been amended. The Act’s legislative history notes that earlier versions are available and that references to other legislation or instruments may be obsolete due to the revision program. The Act has had historical versions as at 1 February 2010 and 1 January 2019.

The source text of the Act does not include any references to litigation, court cases, or judicial decisions. No cases are cited in the Act itself, its schedules, or its legislative history. The Act establishes an administrative process for recommending and approving grants, with limited opportunities for formal challenge. The Commission’s recommendations are not binding on the Minister until after the resubmission step (section 18(4)), after which the Minister must approve. This compressed ministerial discretion may reduce the grounds for judicial review, as the decision becomes almost mechanical. However, the possibility of judicial review on grounds of procedural unfairness, failure to consider mandatory criteria (section 17), or improper purpose cannot be excluded, particularly if a council alleges it was denied a grant without proper consideration of special needs or without being given an opportunity to respond to adverse information. The Commission’s power to require information (section 19) and to conduct inquiries with royal commission powers (section 16) could generate disputes about the scope of the power or compliance, but no such litigation is recorded in the source. The penalty provision in section 13 (misuse of confidential information) is criminal in nature and could lead to prosecutions, but no cases are referenced. The annual report obligation and the ministerial specification of available moneys (section 6) are procedural requirements that could theoretically be subject to mandamus if not performed, but again no litigation is mentioned. Given the absence of any cited caselaw, it is likely that disputes under this Act are resolved administratively through the processes set out in sections 17 and 18, without escalating to court. The narrow scope of the Act - focused on a single, relatively technical function - and the limited class of rights holders (councils) may also contribute to the low litigation profile. Practitioners should be aware that the Act does not create any statutory right to judicial review nor any merits review mechanism, so any challenge would need to rely on general administrative law principles.

A significant trap lies in section 19(3). A council that fails to provide information required by the Commission within the specified time risks the Commission being absolved of any duty to recommend a grant for that council for that financial year. The consequence is not merely a late fee; it is the potential loss of all Commonwealth grant funding for that year. The qualification “Subject to any relevant provision of the Commonwealth Act or an instrument under that Act” may limit this power if federal law mandates a different consequence, but councils cannot assume leniency. The Commission is not bound to recommend, but it may still do so; relying on that discretion is risky. Section 13 imposes a criminal penalty of up to two years imprisonment for a Commission member who uses confidential information for private benefit. This is a broad prohibition that could capture indirect benefits or benefits to associates. Commission members (and their deputies) must be cautious with all information not publicly available. Section 12 provides that an act of the Commission is not invalid because of a vacancy or a defect in appointment. This means procedural irregularities in the Commission’s composition do not provide grounds to challenge a grant decision. Councils cannot argue that a member was invalidly appointed to invalidate an unfavourable recommendation. The Minister’s power under section 18 to refer a recommendation back with reasons, and the Commission’s subsequent obligation to reconsider, does not have a specific time limit. This could allow the process to stall, delaying grant payments with no statutory remedy for councils. Section 7 requires payments to be made without undue delay when Commonwealth funds are paid into the Account, but the recommendation process itself may cause delay. The Commission’s power to hold inquiries under section 16 with royal commission powers means individuals and council officers can be compelled to give evidence or produce documents, subject to penalties for non-compliance under the Royal Commissions Act 1917. This power is rarely used but is available. The definition of “council” in section 4 includes any person or body prescribed as a council. This allows the government to extend grant eligibility to entities other than traditional councils, potentially without full consultation with existing councils. The Account may be used for administrative costs of the Commission (section 5(3)(b)). The amount so used is not capped in the Act, so the Commission’s overhead reduces the pool available for grants. The Commission may consider “special needs” of a council (section 17(2)), but there is no definition, no requirement to notify, and no right of other councils to contest the claim. This creates a risk of opaque, discretionary allocations. Commission members can be removed for “dishonourable conduct” (section 9(4)(c)), an undefined term that gives the Governor wide discretion. The Act contains no provision for public access to the Commission’s minutes or recommendations before the annual report is tabled (section 21). This limits transparency in the allocation process.

For councils, the primary compliance obligation is in section 19. Each financial year, the Commission will issue a notice requiring the council to provide information about its affairs in a specified form and time. The council must respond fully and within the deadline. Failure to do so exposes the council to the risk of no grant recommendation (section 19(3)). To comply, councils should establish internal procedures to track Commission notices, assign responsibility for gathering the required information, and ensure the information is complete and accurate. If the Commission requests further information under subsection (2), the same process applies. Councils should maintain records that can support any claim of special needs (section 17(2)), as the Commission may consider that factor, and a council that wants its needs taken into account should proactively provide relevant data. Although the Act does not require councils to submit a special needs submission, it would be prudent to do so. For the Commission and its members, compliance starts with avoiding any misuse of confidential information (section 13). Members should treat all non-public information obtained through their role as confidential, even after leaving office. Participation in meetings is required; absence from three consecutive meetings without leave can lead to removal (section 9(4)(d)). The Commission must ensure minutes are kept of its proceedings (section 11(5)). When formulating recommendations, the Commission must comply with section 17: ensure total recommended equals the amount specified under section 6; accord with state principles under the Commonwealth Act; and comply with the Commonwealth Act. This requires the Commission to stay informed of any changes to the Commonwealth Act and any principles formulated by the State. The Commission should document how it considered special needs claims, if any. The Commission must forward recommendations as soon as practicable after formulation (section 17(3)). When the Minister refers a recommendation back, the Commission must reconsider and resubmit (section 18). The Commission must submit its annual report to the Minister by 30 September each year (section 21(1)). The Minister’s compliance involves specifying the available moneys in the Gazette as soon as practicable after the start of each financial year after consulting the Commission (section 6). The Minister must consider each recommendation, and if referring it back, give reasons (section 18(2)). On resubmission, the Minister must approve (section 18(4)). The Minister must also cause the Commission’s annual report to be tabled in Parliament within 12 sitting days (section 21(2)), and provide the Commonwealth Treasurer with a statement and Auditor-General’s certificate each year (section 22). The Local Government Association should understand its nomination rights and ensure it nominates suitable persons for the Commission positions. The Treasurer may invest Account moneys after consulting the Commission (section 5(4)). The Governor must ensure appointments are made in accordance with nomination requirements and that any removal follows the grounds in section 9(4). Regulations may impose additional compliance obligations (section 23). Anyone dealing with the Commission should be aware that inquiries may involve royal commission powers, and must cooperate as required.