Decision-making by local governments

Local government legislation provides that voting at council meetings must be open and that decisions are decided by a majority of councillors present at the meeting. The legislation does not provide for a secret ballot to be taken on a matter to be decided.

Each councillor present has one vote and, if the votes are equal or tied, the chairperson (usually the mayor) also has a casting vote.

If a councillor present fails to vote, the councillor is taken to have voted in the negative.

If moved by a councillor, a 'division' may be called to record (in the minutes) how individual councillors voted on a particular matter.

While local government and committee meetings are open to the public, a local government or one of its committees may resolve that a meeting be closed to the public if its councillors or members consider it necessary to close the meeting to discuss certain 'confidential' matters. Such matters include:

• the appointment, dismissal or discipline of employees
• industrial matters affecting employees
• the local government's budget
• rating concessions
• contracts proposed to be made by the local government
• starting or defending legal proceedings involving the local government
• any action to be taken by the local government under the Planning Act 2016, including deciding applications made to it under that Act
• other business for which a public discussion would be likely to prejudice the interests of the local government or someone else, or enable a person to gain a financial advantage.

A resolution (i.e. a formal decision by the local government) that a meeting be closed must state the nature of the matters to be considered (e.g. 'staff-in-confidence') while the meeting is closed.

A local government must not make a resolution (decision) in a closed meeting.

Although members of the public have the right to attend local government and committee meetings, they do not have a right to participate (i.e. have their say) in the meeting unless they are invited by the local government or committee to do so. On some occasions, members of the public may be invited to address the local government and put forward a case or otherwise discuss a particular matter. However, such invitations are not a legal requirement and are a matter entirely for the discretion of each local government.

All councillors are responsible for complying with the local government principles and making decisions in the public interest. Two principles which specifically relate to councillors managing their interests are:

• transparent and effective processes in the public interest
• ethical and legal behaviour of councillors and local government employees.

Councillors have a responsibility to take particular action where questions of material personal interest or conflict of interest arise in council deliberations or decisions. The public interests must always take precedence over the private interests of councillors.

Material personal interest

A councillor has a material personal interest if they or their spouse, parent, child, sibling, business partner employer, or entity of which they are a member, stands to gain a benefit or suffer a loss from a local government decision under consideration. A councillor does not, however, have a material personal interest if the:

• matter under consideration is an ordinary business matter. For example:
  • the making or levying of rates and charges
  • the making of or amendment to a planning scheme or a resolution for the adoption of the budget by the local government
• councillor's interest is no greater than that of other persons in the local government area.

Where a material personal interest exists, the councillor must:

• inform the meeting of their material personal interest in the matter by identifying:
• the name of the person or entity who stands to gain a benefit, or suffer a loss, depending on the outcome of the consideration of the matter
• how the person or entity stands to gain the benefit or suffer the loss
• if the person or other entity who stands to gain the benefit or suffer the loss is not the councillor—the nature of the councillor’s relationship to the person or entity
• leave the meeting room while the matter is being discussed and voted on.

The minutes of the meeting and the local government's website must record the name of the councillor who has the material personal interest in the matter, details of the nature of the material personal interest as described above and whether the councillor took part in the meeting under an approval by the Minister for Local Government.

A councillor who fails to inform the meeting of a material personal interest and votes on a related matter with the intention to gain from or avoid a loss to themselves or another person or entity commits an 'integrity offence'. The maximum penalty for such an offence is 200 penalty units or two years imprisonment and if convicted, the councillor is automatically disqualified from being a councillor for four years.

Conflict of interest

A conflict of interest relates to the private interests of a councillor. A councillor has a conflict of interest in a matter to be discussed at a council meeting if there is a conflict, either real or perceived, between the councillor's personal interests and the public interest. A councillor does not, however, have a conflict of interest in the following circumstances:

• when ordinary business matters are being considered by the local government where the councillor's interest is no greater than that of other persons in the local government area
• where the local government has nominated the councillor to sit on a board of a corporation or other association that is under discussion
• because of the councillor's membership of a community group, sporting club or similar organisation, if the councillor is not an office holder of the group, club or organisation
• because of the councillor's membership of a political party
• because of the councillor's religious beliefs.
• Where a conflict of interest exists, the councillor must inform the meeting of their personal interest in the matter by identifying:
  • the nature of the interest
  • if the councillor’s personal interests arise because of the councillor’s relationship with, or receipt of a gift from, another person—
    • the name of the other person
    • the nature of the relationship or value and date of receipt of the gift
    • the nature of the other person’s interest in the matter

The councillor may choose to leave and stay away from the meeting while the matter is being discussed and voted on.

If the councillor does not voluntarily leave, the other councillors must decide whether the councillor has a real or perceived interest in the matter and whether the councillor must leave the meeting while the matter is discussed and voted on, or may participate in the meeting including voting on the matter.

Where a councillor has declared a conflict of interest, the minutes of the meeting and the council's website must record:

• the name of the councillor who has a conflict of interest
• the nature of the personal interest, as described by the councillor during the meeting
• details about any decisions made by other councillors on whether the councillor can stay in the meeting or if they must leave the meeting
• whether the councillor participated in the meeting or was present during the meeting under an approval from the Minister for Local Government
• if the councillor voted on the matter, how they voted
• how the majority of councillors voted on the matter.

A councillor who fails to inform the meeting of a conflict of interest or who fails to comply with a decision of the other councillors to leave the meeting commits an offence. Such offences carry a maximum penalty of 100 penalty units or 1 year’s imprisonment and if convicted, the councillor is automatically disqualified from being a councillor for four years.

Duty to report interests of other councillors

Councillors must also report concerns to the chairperson of a meeting if they believe or suspect on reasonable grounds that another councillor has a real or perceived conflict of interest, or a material personal interest in a matter in instances where a councillor may not have declared an interest.

A councillor must not take retaliatory action against another councillor for reporting another councillor’s material personal interest or conflict of interest at a meeting. A breach of these provisions carries a maximum penalty of 167 penalty units or 2 years imprisonment, and if convicted the councillor is automatically disqualified from being a councillor for four years.

Attempts by councillors to influence others

Councillors with a material personal interest or conflict of interest in a matter must not influence, or attempt to influence any other councillor, local government employee or local government contractor that is authorised to decide or deal with the matter.

The maximum penalty for such an offence is 200 penalty units or two years imprisonment. If convicted, a councillor is also automatically disqualified from being a councillor for four years.