OK guys. I am reading but it's not going in. Forgive me for asking .. IF the referendum fails (and the majority do) will all Local Government be illegal?? I know there are some local governments that do not deserve to exist, but how can this matter be rectified?? OF they are illegal what is the outlook for all the laws and by-laws of the council?? To make it illegal wouldn't that cause chaos??

That is the great debate Mally! As it stands local governments are created by state legislation. However, the Constitution does not give the power to any government to create another. On the other hand it does not specifically deny governments that power either. It could be argued that the creators of the Constitution did not believe local government should have any power or that governments be given the authority to bestow them power. That is what has happened though. Many councils also act in direct contravention of the constitution and have put in place a taxation regime; rates based on property value or potential income generation (AAV).

Don't believe rates are a tax? When the GST was introduced the then head of the ATO was asked about rates and responded by saying they are a tax. The only time rates are not classed as a tax is when a flat rate is applied. Local governments know they are on very shaky legal grounds and that is why they are desperate to be given constitutional recognition. It has very little to do with funding and very much to do with avoiding adverse High Court cases.

Should the referendum fail the status quo shall prevail until someone, anyone, challenges the legitimacy of local government imposing taxes or laws in the High Court. Until that happens we just keep on blindly accepting an unconstitutional government body interfering in our lives.