Councillor expenses and claims for reimbursement often attract public attention. Councils are largely publicly funded, so their systems for managing expenditure are subject to scrutiny. The integrity and transparency of those systems are critical for maintaining public confidence in local government.
The Local Government Inspectorate has identified instances of councillors making false claims or inadequately supported claims for expense reimbursement during prior investigations.
The Local Government Act 2020 contains limited guidance about the kind of resources that should be available to support councillors, and in defining what is an appropriate expense. This places an onus on councils to ensure that expenses policies, which govern the reimbursement of out-of-pocket expenses to councillors, meet community expectations.
In June 2020, Local Government Victoria published a draft Council Expenses Policy to support councils in their requirement to adopt an expenses policy by 1 September 2020.
Scope of the examination
This 2019–20 review of councillor support was comprised of:
- surveys of councillors and governance staff
- an audit of several councils to assess compliance with legislation and identify best practice.
Our review assessed what support is provided to councillors, levels of satisfaction with this support and what improvements could be made. We also examined what kinds of expenses are being claimed and how expenses policies worked in practice.
Overview of councillor support and expenses policy
Sections 39 to 42 of the Act provide the framework for councillor support and entitlements, which includes, but is not limited to:
- an optional allowance
- a toolkit of resources and facilities such as a mobile phone, computer, stationery, taxi vouchers, and council office space
- reimbursement of out-of-pocket expenses incurred during their role, such as information technology costs, meals, travel, training, and childcare.
Councillors can choose to receive their entire entitled allowance, part of it or no allowance. At the time of our review, the allowance was set by the Minister for Local Government, with councils divided into three categories based on their income and population. Each of the three categories had a lower and upper range of allowance for councillors and an upper range for the mayoral allowance. However, Melbourne City Council’s and Geelong City Council’s allowances were fixed separately.
Under the Act, councillor and mayoral allowances are now determined by the Victorian Independent Remuneration Tribunal.1 On 7 March 2022, the tribunal’s decision, which took effect from 18 December 2021, set out a base allowance for each council member dependent upon their role (councillor, mayor, or deputy mayor) and the council allowance category assigned to their council (categories 1–4).
Councils are only required to reimburse councillors for genuine out-of-pocket expenses reasonably incurred and reasonably necessary to perform their role.
At the time of our review, the Local Government (Planning and Reporting) Regulations 2014 (2014 Regulations) stipulated that travel expenses, car mileage, childcare, information and communication technology, and conference and training expenses were reimbursable.
This has since changed, with the Local Government (Planning and Reporting) Regulations 2020 (2020 Regulations) now stating that travel expenses, professional development expenses, and expenses to support the performance of the role can be reimbursed.
The tribunal now sets a remote area travel allowance equal to $44 per day, up to a maximum of $5,500 per year for each councillor. The eligibility criteria for this allowance are set out in the 7 March 2022 determination.
Councils have scope to establish the criteria for reimbursable out-of-pocket expenses and the procedures by which they will be reimbursed in their Council Expenses Policy.
To be compliant with the Act, a council’s expenses policy must:
- specify the procedures for applying for reimbursement and in reimbursing expenses
- apply to both councillors and delegated committee members
- comply with any reimbursement requirements in the Regulations
- include reimbursement of childcare costs and costs for carers in a care relationship.2
2 As defined in the Carers Recognition Act 2012.
Reviewed 22 February 2023