NSW Local Government Minister wants to close election loophole

By WENDY BACON

The NSW Minister for Local government Wendy Tuckerman is considering amending the NSW Local Government act to close a loophole used by Inner West Labor Councillor Zoi Tsardoulias to get elected in an LGA where she neither lives or pays rates. 

A spokesperson for the Minister said that the government would take Office of Local Government advice on the amendment before the next local government election. 

Tuckerman’s move was in response to a letter from Greens spokesperson for Local government and corruption and Balmain MP Jamie Parker drawing the Minister’s attention to City Hub’s investigation into an obscure section in the NSW Local government act which has been interpreted as allowing companies that hold more than one rateable lease to nominate a person to represent them on the non-residential roll who has no connection with the company. This loophole (Section 272 4A) contrasts with a section in the City of Sydney Act which only allows companies to nominate someone who is an office holder of the company.

Parker wrote that he was concerned that the section “seemingly permits businesses that occupy more than one property to nominate a third-party with no connection to the local area to enrol and nominate to be a Councillor. In my view, local councillors should have a strong connection to the local government area that they represent. The rules that control these nominations are otherwise strict to keep local government local. Do you think it is appropriate to businesses be permitted to nominate individuals with no connection to the local community to nominate as a candidate for local government?” 

In October, Minister Tuckerman responded  that “the government agrees that Councillors should have a connection to the areas they are elected to represent and will consider this issue further prior to the next local government elections.”

Greens and Independent Councillors support amendment to close loophole

There is substantial support on the Inner West Council for the amendment.

Five Inner West Greens Councillors -Liz Atkins, Kobi Shetty, Marghanita Da Cruz, Dylan Griffiths and Justine Langford -agree that the Act should be amended. In response to questions, they told City Hub, “As it stands, the NSW Local Government Act has a loophole which undermines local democracy. We support Jamie Parker MP’s call for this to change.”

Long term Independent Councillor John Stamolis, who was one of the first to speak out about how shocked he was to find that you could get elected to Council without being a resident or ratepayer in the area said, “Any rule which permits a person to be elected to a Council in this way is undemocratic and needs to change. Everyone I speak with wants this undemocratic rule abolished. It undermines local democracy and it is essential that the NSW Electoral Commission and Office of Local Government take action now.”

Independent Councillor Pauline Lockie said, “I think most people expect their elected representatives to have a connection with the area they represent, especially at local government level, and to be transparent about that connection.”

How the loophole works

There are two local government electoral rolls in NSW. The main roll is the regular residential electoral roll.. The second is a non-residential role of rate payers who want to vote. These can be individuals or companies that own or lease rateable land. 

There are five wards in the Inner West LGA, one of which is Leichhardt, another is Marrickville. To nominate as a Councillor in a ward, you need to be on the residential or non-residential roll in the LGA. Around June last year, Leichhardt Municipal Cafe owner Maurice Portelli was approached by a ‘friend’ to nominate Cr Tsardoulias onto the roll although she had no formal connection with his cafe.

He declined to name the friend but said that he agreed to the request. The Labor party then nominated Cr Tsardoulias to stand on its Marrickville ward ticket in the local government elections in December 2021. With a very narrow margin of 77 votes, her successful election delivered a majority of 8 Labor Councillors to 7 Greens and Independents. 

Few people are aware of Section 271 Part 4A to get a roll. It is not promoted on the Inner West Council’s election page. Cr Tsardoulias’ connection to the recently opened cafe remained hidden as she did not publicly disclosed it before the 2021 election or in her first disclosure of interests signed after the election.

City Hub does not suggest Cr Tsardoulias has acted unlawfully. In response to questions earlier in the year, she told City Hub, “I take my responsibilities very seriously and continue to undertake my obligations under the Act in good faith. I have sought legal advice from a suitably qualified solicitor and am confident I have met both my obligations in declaring interests in my annual return of disclosure and the requirements to nominate for and be elected to public office.”

Councillor Tsardoulias reveals Leichhardt cafe nomination

In her first declaration of interests, Cr Tsardoulias did not disclose the connection at all.  This attracted City Hub’s attention because it was not clear how she was eligible to stand for Council if she did not live or have any connection to a business in the LGA. 

In her annual 2022 declaration which followed our investigation, she initially declared that she was representing an “owner” of land who she did not name. This was incorrect. City Hub sent further questions to the Inner West Council. 

Cr Tsardoulias submitted a fresh declaration correctly disclosing that she had been nominated to the non-residential roll by the Leichhardt Municipal Cafe. She added a statement acknowledging the mistake and explaining that it was an “administrative” one.

City Hub wanted to know whether the other Labor Councillors would support an amendment and whether they now agreed that the connection should have been declared in the first place. We also asked about the identity of the ‘friend’, which Labor Councillors were aware of the Portelli arrangement and whether Tsardoulias met with him before the nomination. We wanted to know if there was any connection between the agreement and Mayor Darcy’s Byrne and now Deputy Mayor’s Phillipa Scott attendance at the cafe opening that occurred around the same time. 

Previous questions to the Mayor Darcy Byrne and Marrickville Ward Councillor Matt Howard, who works for the Shadow Minister for Transport and Summer Hill MP Jo Haylen, had neither been acknowledged nor answered. This time we got a four word response from Labor Councillor for Ashfield Mark Drury – “This is not journalism”. (The author does not agree and is writing a separate piece about this issue.)

No other Labor Councillor acknowledged or responded to the questions.

On the issue of whether the arrangement should have been disclosed, the five Greens Councillors responded:

“We are also of the view that voters should be aware of candidates’ connection to the LGA, through the NSW Electoral Commission and other disclosures by candidates/councillors. If an elected Councillor does not have a relevant connection to the local government area (as stipulated in the NSW Local Government Act), for transparency they should declare this in their disclosure of interests.”

While there is no suggestion that manipulation or corruption has occurred in the Inner West, hidden connections that would allow a party to approach business owners to nominate friendly voters does leave rolls and elections open to manipulation, especially in tight elections. 

The potential danger concerns Greens Councillor Justine Langford who added, “In my opinion, any candidate or councillor who is dependent on the nomination of a corporation to be eligible for election, and consequently that eligibility can be taken away by the corporation at its sole discretion, has in principle an increased exposure to risk of corruption when compared to a candidate who lives in the LGA and is eligible to stand in their own right without having to gain the endorsement of a corporation.

For local government to remain local, elected representatives should live in the local government area that they represent. Living in the area means knowing the area, being embedded and closely connected to the local community and aware of any issues. Elected representatives should be visible, accessible and accountable to the local residents and businesses at all times.”

Who is responsible for Non-residential rolls?

City Hub submitted questions to the NSW Electoral Commission. A spokesperson for the Commission told City Hub that the LGA General Manager (GM) is responsible for certifying the non-residential rolls and that if a person is concerned about whether a person is entitled to be on the roll before an election, the issue can be raised with the GM. If the person is not satisfied with the GM’s response, the matter could be taken to the NSW Civil and Administrative Tribunal. 

This assumes that the non-residential roll is open for public inspection on request which Section 302 of the Local Government Act says it must be. But when City Hub attempted to inspect the roll earlier in the year, the names were visible but not the business addresses to which they are linked. When City Hub challenged the redactions, the General Manager Peter Gainsford has said we could apply through GIPA (Freedom of Information legislation), which is a lengthy and sometimes expensive process. It would certainly not be practical in the case of someone concerned about the eligibility of a candidate in the lead up to an election. As this is a ‘public right to know’ issue, City Hub has sought clarification from the Electoral Commission and will update the story when that is received.

City Hub is also seeking information from the Labor opposition on whether they would support an amendment if elected.

Wendy Bacon was previously a Professor of Journalism at UTS and Director of the Australian Centre for Independent Journalism. She is not a member or donor to any political party. She supported Greens Deputy Mayor Sylvie Ellsmore in the Local government election in 2021.