Enemy MPs Unite to Keep Contracts Secret in Councils

The biggest voting blocks in the Victorian Parliament teamed up in March to ensure Councils can continue to keep contract discussions and decisions hidden from ratepayers.


Liberal Democrats MP Tim Quilty, introduced a motion during debate on the Local Government Bill 2019 to stop Councils being able to close meetings for commercial discussions.


He passionately explained to his fellow MPs that he knew from experience as a Wodonga councillor that important information is being withheld from residents and the new Legislation should not allow commercial contracts to be an excuse for secret decisions….


“ Honest governments do not need to conceal financial information from ratepayers. When you do business with a council you are doing business with the ratepayers, and the ratepayers have a right to know how their money is being spent.

“During my time on council I witnessed the overuse of commercial confidentiality arrangements. In some cases this even included the cost of services procured by the council. Indeed from time to time councils were told that they were not allowed to see the contracts they were voting on because they were confidential.


“How can ratepayers determine if their council is value for money if they do not know what they are getting or how much they are paying for it?”


Local Government Minister Adem Somyurek rejected the need for the motion saying the new Bill has more rigorous wording than the 1989 Act.


“This whole section of confidential information tightens up the grounds for classifying information as confidential information,” he promised.


“The subclause that Mr Quilty seeks to amend is:

private commercial information, being information provided by a business, commercial or financial undertaking that—

(i) relates to trade secrets; or

(ii) if released, would unreasonably expose the business, commercial or financial undertaking to disadvantage ...

It is virtually identical to the Freedom of Information Act, so I think it is worthwhile. I think it is good practice to bring the confidential information definition into alignment with the freedom of information legislation.”


Minister Somyurek repeatedly asserted his trust in Councils to do the right thing, during the lengthy debate on the Bill.


But how will residents know if their Council has correctly interpreted the definition of ‘commercial’ if the information at the centre of the decision is confidential?


Who gets to determine what’s unreasonable? The business or the Council staff? How will Council know if something is a trade secret or not?


It would have been far simpler for ratepayers, Councillors and Council staff if the default decision was that contracts be discussed in open meetings and the business has to prove special circumstances to have the information kept secret.


Mr Somyurek also made reference to the Ombudsman’s 2016 report into the Transparency of Council Decisions, implying that the clauses relating to commercial confidentiality followed the Ombudsman’s suggestions.


In fact, the Ombudsman’s report states …

“There is no reason why individual items proposed for discussion in closed meetings cannot be identified in both the minutes and the agenda released to the public prior to the meeting, with a particular provision of [relevant section and sub-section of the Act] attributed to each of these items. For example, the name of the contract being decided or the general nature of the matter which involves some hardship to a resident or ratepayer.”


Furthermore the Ombudsman’s report suggested sunset clauses so that confidential decisions could be released at a later date when the importance of the timeframe has passed….“.or that key details of contracts awarded in closed meetings, such as the name of the successful contractor, the amount of the contract and a general description of the scope of the contract should be released promptly after the contract is signed. In most cases, the names of unsuccessful tenderers, or at a minimum, the number of unsuccessful tenderers could also be released.”


The Ombudsman’s report also contained evidence from a Council CEO explaining that contracts can be redacted to take out identifying information and decisions made in open meetings using an objective decision-making matrix.


None of the ombudsman’s suggestions were included in the new Bill.


So despite Mr Quilty’s attempts to ensure ‘commercial’ concerns aren’t used as a blanket cover to hide poor procurement practices, waste, over-spending, business collusion and kickbacks for contracts only three MPs out of 40 supported his efforts.


And despite me providing several months’ advance notice of my intentions on this Bill all five of my Upper House representatives voted against this clause.


Which means that once again I have to spend time and effort carefully watching Council to ensure they don’t rort the commercial clause in the Legislation to close meetings to suit contractors.


It would have been more ratepayer focussed to just vote for Mr Quilty’s motion.


Instead they voted against his motion and my wishes.

I’m looking forward to repaying the favour in 2022.


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