Posted on September 25, 2024 by Samantha Hainke and Katie Mortimer

NSW Government passes Bill creating new governance structure for ‘Rural and Remote Councils’

Last week the Local Government Amendment (Rural and Remote Councils) Bill 2024 (Bill) was passed by NSW Parliament. Once it commences, the Bill will insert a new Schedule 11 to the Local Government Act 1993 (LG Act) that will create a new governance model for local councils designated to be a ‘rural and remote council’.

The Bill was incepted to assist Central Darling Shire Council return to democratically elected representation following over a decade of being in administration.

In the Bill’s Second Reading Speech, the Minister for Local Government explained that Central Darling Shire Council is the largest local government area in the State but has a population of less than 1,800 people – 1,100 of which are electors. The Minister stated this leads to challenges to the council’s ongoing financial sustainability, but that the Bill proposes a practical solution to ensure representative democracy and the sustainable delivery of local services and infrastructure.

The changes in the Bill are not expressly confined to Central Darling Shire Council and the governance model can be applied more broadly to any local council in administration. New Schedule 11 will apply to any council designated as a ‘rural and remote council’.

Designation as a ‘rural and remote council’

Regulations made under the LG Act may designate a council as a ‘rural and remote council’. The Minister may recommend the making of a regulation only if:

(a) the council meets the criteria specified by the regulations, if any, and
(b) an administrator has been appointed for the council under Chapter 9, Part 2, Division 6 and remains in office.

The criteria referred to in (a) is not yet publicly available.

Governance structure for rural and remote councils

If a council is designed as a rural and remote council, then the regulations must make provision for that council’s membership.

New Schedule 11 will require the regulations to provide that at least:

• one councillor is an ‘appointed councillor’ (discussed below),
• if the council is divided into wards – one elected councillor is elected for each ward,
• one half of the councillors must be elected councillors.

The regulations may also alter the number of councillors of a rural and remote council, however, it must have at least 5 and not more than 15 councillors, one of whom must be the chairperson.

Appointed Councillors & The Chairperson

The Minister may appoint a person as an ‘appointed councillor’ by order published in the Gazette. In making appointments, the Minister must, as far as reasonably practicable, ensure the rural and remote council has councillors who collectively have the following attributes:

• experience in local government administration, financial management and governance,
• the ability to represent the interests of the Aboriginal population of the area,
• experience in emergency management, and
• experience in conservation, environmental sustainability and climate change adaption.

References to a councillor in the LG Act or any other Act or instrument, will be taken to include an appointed councillor.

The Minister must appoint one ‘appointed councillor’ to be the chairperson of the council. References to the mayor of a council in the LG Act or any other Act or instrument, will be taken to be a reference to the chairperson of the council.

The councillors of a rural and remote council may elect a deputy chairperson of the council. That deputy chairperson may exercise the functions of the chairperson in certain instances (including illness and absence).

Other Provisions 

New Schedule 11 also contains provisions dealing with:

• elections for rural and remote councils,
• the division of a rural and remote council into wards,
• casual vacancies for elected councillors,
• fees, expenses and facilities that may be paid or provided to councillors – Chapter 9, Part 2, Division 5 of the LG Act will apply to elected councillors, but the Remuneration Tribunal must determine the maximum and minimum amounts of fees to be paid to appointed councillors and the chairperson of a rural and remote council,
• meetings of rural and remote councils – a rural and remote council must meet at least 4 times each year, each time in a different quarter,
• disciplinary action for misconduct – section 440I of the LG Act applies as if references to the Departmental Chief Executive were references to the Minister, and
• regulations in relation to rural and remote councils.

The Bill is now awaiting assent and will commence on a date to be proclaimed. A copy of the Bill can be found here.

If you have any questions in relation to this post, please leave a comment below or contact Samantha Hainke 8235 9727 or Katie Mortimer on 8235 9716.