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Labor State Government, the then Shadow Minister for Local Government was recorded as having stated:

Under no circumstances should any municipality be put in the hands of persons who have not been democratically elected (Morris 1998 p.50).

In 1994, this statement was to become a dim memory for the Kennett Victorian State Government.

In 1992 the Kennett Coalition Government was elected in the state of Victoria in both Houses of Parliament and made sweeping changes to Victorian local government (Galligan 1996; Kiss 1997; Rayner 1997; Vince 1997; Galligan 1998b; Hunt 1998a; Hill 1999; Kiss 1999).

The Kennett Government reforms of Victorian local government will be outlined in some detail in this section due to their significance and relevance to this research project. Some aspects of the Kennett reforms will be related to topics in other sections of this thesis, but the material covered in this section will not be repeated. It should also be noted that the discussion of the Kennett reforms will predominantly focus on how these reforms impacted on the role and structure of Victorian local government. It is not intended to provide a critique on the actions of the Kennett Government itself, although some inferences in the reference material on this topic are inherent.

The Kennett Government reforms that were implemented throughout the state of Victoria evoked a significant amount of comment as illustrated by the range of articles and books on this topic (Johnstone and Kiss 1996; Ernst, Glanville and Murfitt 1997; Munro 1997; Rayner 1997; Wensing 1997a, 1997b; Kiss 1997; Vince 1997; People Together Project 1997, 1998; Costello 1998; Rance 1998a; Davidson 1998; Dore 1998; Galligan 1998a; Hunt 1998a; Costar and Economou 1999; Hill 1999; Mowbray 1999; Ellison 2000; O’Neill 2000; Purple Sage Project 2000; Gross 2001; Kloot 2001; Worthington and Dollery 2002; Allan 2003). The range of writings revealed a diversity of opinion on the success or otherwise of the Kennett reforms in terms of local democracy, community and economic outcomes, service delivery and local government structure.

The Kennett State Government, influenced by the ultra conservative views of the Institute of Public Affairs, made a number of significant changes to a range of institutions, including local government. The state government amended the Victorian Constitution thirty-four times in its first two years of office (Rayner 1997; Kiss 1999; Mowbray 1999; Purple Sage Project 2000), including a change that ensured that the reform of local government could not be stopped through legal avenues (Kiss 1997; Mowbray 1999).

In 1993 the Victorian Local Government Board of Review was established and was empowered to develop a new framework for Victorian local government (Vince 1997; Wensing 1997b; Burke and Walsh 1998; Kiss 1999; Worthington and Dollery 2002). The reforms that were implemented can be summarized as including the reduction of local government municipalities from 210 to 78, the dismissal of all elected councillors, the introduction of compulsory competitive tendering to the value of 50% of expenditure, a 20% cut in rates, rate capping, the appointment of interim chief executive officers, changes to the electoral structure and a range of performance reporting requirements (Proust 1995, 1997; Ernst, Glanville and Murfitt 1997; Rayner 1997; Vince 1997; Wensing 1997b; Kiss 1997, 1999; Digby 1999; Mowbray 1999; Municipal Association of Victoria 2002; Worthington and Dollery 2002; Burdess and O’Toole 2004).

There are four significant impacts of the Victorian local government reforms that were to impact on its role and structure.

The first significant issue that arose from the Kennett reforms was the vulnerability of Victorian local government’s democratic role (Kiss 1997; Rayner 1997; Vince 1997; Chapman 1997a; People Together Project 1997, 1998; Costello 1998; Galligan 1998b; Kiss 1999; Mowbray 1999; Ellison 2000). The dismissal of democratically elected local government councillors was described as an attack on democracy (Brumby 1996; Rayner 1997; Vince 1997). Galligan (1998b) stated that the reform process dealt brutally with established local democracy in the short-term (p.205). Rayner (1997) further maintained that the protests were less against amalgamation as such than against the loss of local democracy (p.172).

In section 1.7.2 it was noted that the presence of elected boards was a tradition of local democracy in Victoria. The concept that all elected councillors could be dismissed challenged this tradition. Russell (1997) stated:

The (State) Government’s initial action of removing all elected councillors in the guise of facilitating boundary amalgamations was a profoundly undemocratic act for which it should not be pardoned (p.11).

Costello (1998) supported Russell’s (1997) opinion and maintained that it was usual practice for elected members to stay in power and oversee the transition to the new structures, not to be dismissed. This point of view was supported by a number of commentators (Brumby 1996; Chapman 1997a; Kiss 1997; Rayner 1997; Vince 1997; Hunt 1998b; Kiss 1999; Mowbray 1999; Gross 2001; Kiss 2003; Miller and Dowling 2004). Some writers on this subject, however, welcomed the appointment of commissioners by the state government from an administrative perspective (Proust 1995).

Elections for most local government municipalities occurred during the years of 1996- 1997, with a small number held some years later (Johnstone 1996a; Kiss 1999). However, the introduction of postal voting for these elections that benefited non-property owners and the increased cost of election campaigns for potential candidates, further impacted on the democratic system of Victorian local government (Kiss 1997).

The second impact of the Kennett Government’s reform process was a reinforcement of a philosophy that Victorian local government’s prime role, as an agent for state government, was to run a series of businesses that delivered services to its customers (Hallam 1994; Local Government Board 1995; Hallam 1998), rather than being a legitimate level of government in its own right (Munro 1997; Rayner 1997; People Together Project 1997, 1998; Costello 1998; Kiss 1999). The view that Victorian local government was considered to be an agent for state government was demonstrated by the fact that local government was used to collect the deficit tax that was imposed on all property owners by the state government (Mowbray 1999).

The third impact of the Kennett reforms was the introduction of compulsory competitive tendering for services. Rayner (1997) stated that this reform removed the welfare orientation of many community services (p.172), and resulted in citizens becoming customers (also refer Munro 1997; People Together Project 1997). It was stated that residents on lower incomes could not afford the privatized services and that compulsory competitive tendering resulted in increased unemployment (People Together Project 1997, 1998; Costello 1998; Miller and Dowling 2004).

There is a body of literature that questioned the cost savings of compulsory competitive tendering and whether the objectives of this initiative were achieved more broadly (Hodge 1996; Kiss 1997; Pope and Harrowfield 1997; Worthington and Dollery 2002). It was considered that the initial savings that resulted from compulsory competitive tendering were not sustainable and came at the cost of management issues, difficulties in the integration of systems, community dissatisfaction, a decline in capital expenditure, service quality and advocacy capacity (Vince 1997; Munro 1997; Kiss 1997; Rance 1998a; Kiss 1999; Worthington and Dollery 2002).

It was acknowledged, however, that the Victorian model of compulsory competitive tendering legislation did leave flexibility for local government to determine which services were tested, which was unlike the United Kingdom model of tendering where specific services were prescribed (Hallam 1994; Local Government Board 1995; Moore 1996; Digby and Kennedy 1998; Blacher 1998; Burke and Walsh 1998; Digby 1999).

Finally there were a number of direct impacts from the amalgamation of local government councils.

The amalgamations impacted on local government’s services role particularly in rural areas where the closure of offices resulted in residents having to travel further to receive services (Munro 1997; People Together Project 1997; Rance 1998a; Purple Sage Project 2000; May 2003; Miller and Dowling 2004).

The restructure of Victorian local government also resulted in a significant reduction in the average number of elected members as a ratio of the population (Rayner 1997; Kiss 2003). The increased size of local government boundaries impacted on the way that citizens and local government representatives interacted and eliminated the sense of intimacy (Rayner 1997 p.176) between the two parties.

As an overview of the Kennett Government reforms, it was considered that the reforms generally diminished and limited the role of Victorian local government (Hill 1999; May

2003). Kiss (1999) maintained that during this period, local government was turned into

local administration (p.110).

There were also a number of outcomes of the Kennett reforms that positively impacted on Victorian local government’s capacity to undertake its role. These benefits were considered, however, to be an unintended outcome of the Victorian local government reforms (Kiss 1997).

The first benefit of the amalgamations was the creation of larger and more powerful local government units which enabled more efficient service delivery and responsive community engagement programs (Local Government Board 1995; Galligan 1996; Rayner 1997; Burke and Walsh 1998; Hill 1999; Miller and Dowling 2004). The larger local government entities provided greater strategic capacity, expanded information technology systems, front of house citizen services and the development of corporate and long-term financial planning (Aulich 1999; Digby 1999; Miller and Dowling 2004).

The new amalgamated councils also had the benefit of providing a stronger voice on behalf of their communities, especially in terms of Victorian local government’s advocacy role (Hill 1999).Hill (1999) stated that restructured local government:

has shown itself capable of delivering quite a powerful punch when an appropriate occasion arises (p.15).

There was a view that in the post Kennett Government reform period and when local democracy was restored, Victorian local government needed to take up the challenge of re-establishing its place within the political system (Johnstone 1996a; Kiss 1996, 1997; Salvaris 1997; Rayner 1998).