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Council members are expected to make decisions in the best interests of their community. To do this, they must consider each issue on its merits.
Decision-making could be influenced — or perceived to be influenced — in a number of ways, including through financial relationships, personal relationships and the receipt of gifts. The Local Government Act 1995 (the Act) sets out
requirements on council members, CEOs and local government employees to ensure transparency and accountability in decision-making.
This guideline deals with interests arising through the receipt of gifts. It gives an overview of the requirements of council members and Chief Executive Officers (CEO) for the disclosure of gifts received in an official capacity and the interest that
may arise from the receipt of any gift. The gift provisions in this guideline do not apply to local government employees (other than the CEO) or election gifts.
Other related operational guidelines:
A gift is defined under section 5.57 of the Act as a conferral of a financial benefit (including a disposition of property) made by one person in favour of another person unless adequate consideration in money or money’s worth passes from the person
in whose favour the conferral is made to the person who makes the conferral. It includes any contributions to travel.
“Consideration in money or money’s worth” refers to the value of a gift compared to a person’s contribution. As an example, which was outlined in Scaffidi v CEO, Department of Local Government and Communities,
a council member being provided with expensive accommodation in an exotic location in return for a minimal contribution at a conference such as cutting a ribbon, is not likely to be proportional to the contribution made by the council member. In this
case, the council member would need to disclose the accommodation (and potentially other expenses such as airfares and meals) as a gift.
Councillor Sandy is invited to a function and requested to give a 20 minute presentation. As part of the function, she is provided with a three course meal, including drinks.
Tickets to the function are $400. Councillor Sandy determines that her time taken to prepare and deliver the speech is valued at $200 (calculated using an appropriate hourly rate). This is deducted from the ticket value ($400), giving a net value
of the gift of $200. As it is under $300, the gift does not need to be disclosed or recorded on the gift register.
There are two aspects to gifts: disclosure of receipt and disclosing an interest when a matter comes before council or when the CEO provides advice or a report to council.
In accordance with the Act, council members (section 5.87A) and CEOs (section 5.87B) are required to disclose gifts that are received in their capacity as a council member or CEO and:
Additionally, a gift given by two or more related bodies corporate (as defined by section 50 in the Corporations Act 2001 (Cth)) is considered to have been given by a single corporation.
Company GoGetEm gives a gift valued at $250 to councillor Sandy, as does Company ComeGetMe.
51% of the shares in ComeGetMe are held by GoGetEm. These are related bodies corporate so councillor Sandy would be required to disclose a gift to the value of $500
(The position would be the same if GoGetEm owned less than half the shares but had the power to control the composition of the board of ComeGetMe.)
All such gifts must be disclosed within ten days of receipt — the CEO makes the disclosure to the mayor or president; council members make the disclosure to the CEO. The CEO must update the gifts register within 10 days and an up-to-date version
of the register is required to be published on the local government’s official website.
Form 4 of the Local Government (Administration) Regulations 1996 sets out the information that is to be disclosed:
These disclosures can be made by email to the CEO, ensuring all information is included. Best practice would be for the local government to have a standardised form for gift declarations as this supports declarations inclusive of all the required information.
For an example of a gift register refer to figure 1.
The recipient of a gift must decide whether the gift is received in their capacity as council member or CEO. The questions to ask yourself are: would the gift have been given to me if I was not a member of the council or CEO? And would a gift of that
value be given to me if I was not a member of the council or CEO? If the answer to either is no, the gift must be disclosed if the value of the gift (or the cumulative value of gifts from the same donor in a twelve-month period) is over $300.
While the circumstances surrounding the provision of a gift or why people are invited to a celebration of an occasion may differ, examples of gifts that generally wouldn’t have to be disclosed include:
In all cases, including those above, consider the nature of the relationship between you and the donor when forming your decision to disclose receipt of the gift. The onus is on you, as council member or CEO, to prove that you did not receive the gift
in the capacity of council member or CEO if an allegation is made.
Figure 1: Example of gift register — Section 5.87C of the Act
To assist council members and CEOs with complying with the new gift framework, refer to figure 2 below.
The onus is on the recipient to establish the value of the gift, based on the market value on the day the gift was received. How this can be established will depend on the nature of the gift received. For example, the price of a bottle of wine can be
established through an internet search or a piece of artwork through contacting the artist. Hospitality can be determined by contacting the restaurant or caterers directly or from an internet search.
The Local Government (Elections) Regulations 1997 provide for the disclosure of electoral gifts in a separate electoral gift register and are not required to be disclosed again under section 5.87A. The provisions relating to these gifts are being reviewed
as part of the development of a new Local Government Act. More information on the treatment of these gifts can be found on the department’s website.
Figure 2: The gift reporting framework under the Local Government Act 1995.
The interest provisions are aimed at ensuring that decision-making is free from influence and so decisions can be made in the best interests of the community.
The interest relating to gifts provisions recognise that a relationship is created between the donor and a recipient of a gift which could be perceived to affect decision-making. It is irrelevant why the gift was received - whether in the person’s capacity as a council member or CEO or some other capacity.
What is critical is that there is a matter before council from which the donor could benefit or suffer detriment.
The basic principle is that the council member is not to participate in any part of the meeting dealing with the matter (section 5.67). They must be absent from any deliberations. If the council member has such an interest, in accordance with section
5.65, they must disclose this interest in writing to the CEO before the meeting or immediately before the matter is discussed.
If it is the CEO who has the interest due to receipt of a gift, they are not to provide advice to council or prepare reports for council, either directly or indirectly (section 5.71A).
Councillor Sandy receives a $450 watch for her birthday from her friend, Sally. As Councillor Sandy did not receive the gift in her capacity as a council member, the gift does not need to be disclosed or entered in the gift register.
Two months later, Sally decides to open a café in town and makes an application to the Shire of North, where Sandy is a council member. As Sandy has received a gift from Sally that is over $300, in accordance with section 5.62(1)(eb), Sally
is a closely associated person and therefore Councillor Sandy has an indirect financial interest. This requires Sandy to declare an interest and she cannot vote on the matter before council.
Certain gifts are specifically excluded from the conflict of interest provisions (section 5.62(1B)). These are gifts relating to attendance at an event where attendance has been approved by the council in accordance with the council endorsed attendance
at events policy, and gifts from specified entities. Regulation 20B of the Local Government (Administration) Regulations prescribe the specified entities as WALGA (but not LGIS), ALGA, LG Professionals, a State public service department, a Commonwealth,
State or Territory government department or another local government or regional local government. Gifts from any of these sources must still be disclosed and published on the gifts register if over $300 in a twelve-month period. To assist council
members and CEOs with understanding how the interests relating to gifts operates, refer to figure 3.
Note: you can have a relationship with a person who has an interest in a matter before council for reasons other than the receipt of a gift. Section 5.62 of the Local Government Act 1995 contains an extensive list of closely associated persons. In all
situations of financial interest (either direct or indirect) you must disclose the interest and exclude yourself from participation. Some relationships that your partner has (such as employment) also create a conflict for you.
Figure 3: Interests relating to gifts under the Local Government Act 1995
The receipt of a gift over $300 (or the cumulative value of gifts from the same donor in a twelve-month period) prevents a council member or CEO from participating in, or providing advice or report on, the matter to be discussed (unless approval has been
As council is in the best position to determine whether the receipt of a gift is likely to affect the person’s decision-making, in accordance with section 5.68, council can allow a council member to participate if they have received a gift valued
at up to $1000 but only where they decide:
If it is the CEO which has the interest relating to a gift, and the gift is valued at up to $1000, the council can allow the CEO to provide advice or a report, if they believe the nature of the interest is unlikely to influence the CEO. If the council
decides that the interest is not trivial or insignificant and could be perceived to influence, the CEO should make arrangements for another employee to provide the advice or report.
The decisions to permit participation and the council’s reasons for making that decision must be recorded in the minutes of the meeting.
For an interest created by a gift(s) over $1000 in a twelve-month period, only the Minister can make a decision to allow participation or the provision of advice or a report.
The Minister can only decide to allow a council member to participate if:
The Minister may also allow a CEO to provide advice or a report, if the Minister is of the opinion the interest is unlikely to influence the CEO in the provision of the advice or report. An application for the CEO to provide advice or report must be made
by the council and not the CEO.
An application made to the Minister must include: the nature of the interest and any other information required by the Minister to enable the Minister to make a decision.
If the Minister allows a council member to participate or the CEO to provide advice or report, the Minister’s decision and the reasons for it must be recorded in the minutes when the matter is considered by council.
To assist council members and CEOs with understanding how approval to participate provisions operate, a flowchart is included at figure 4.
Figure 4: Approval to participate when there is an interest under the Local Government Act 1995.
A failure to declare an interest relating to a gift carries a maximum penalty of $10,000 or imprisonment for 2 years.
Participation in a meeting when an interest has been disclosed, unless otherwise permitted, carries a maximum penalty of $10,000 or imprisonment for 2 years.
A person must not contravene a condition imposed by the Minister allowing participation. The maximum penalty is a $10,000 fine or imprisonment for 2 years.
A CEO who makes a disclosure must not provide the advice or report unless the CEO is allowed to do so by the council or Minister. The maximum penalty is a $10,000 fine or imprisonment for 2 years.
A failure to disclose receipt of a gift (or series of gifts from the same donor in a 12-month period) over the value of $300 within 10 days of receipt by a council member or CEO carries a maximum penalty of $10,000 or imprisonment for 2 years.
Providing information that the person knows to be false or misleading in a material particular or likely to deceive in a material way carries a maximum penalty of $10,000 or imprisonment for 2 years.
The CEO as the principal officer of a local government has the legal duty and responsibility to report any breaches under the disclosure of financial interest provisions of the Act in accordance with section 28 of the Corruption, Crime and Misconduct
Council members are expected to make decisions in the best interests of their community. To do this, each issue must be considered on its merits. The gift disclosure requirements and the conflict of interest provisions are aimed at ensuring that decision-making
is free from influence.
When accepting gifts, council members and CEOs must be aware, and consider the nature of, the relationship they have with the people that are providing them gifts.
The onus is on you to decide whether a gift received should be disclosed and that disclosure is made in a timely manner.
You must also pay careful attention to interests that are created and exclude yourself from decision making (or the provision of advice if a CEO) unless otherwise permitted.
The community’s trust in local government is crucial to its success.
Further information on conflicts of interest is incorporated in Council Member Essentials — Conflicts of Interest training module prescribed in Regulation 35(2)(iv) of the Local Government (Administration) Regulations.
Do not submit enquiries with this form.