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Department of Premier and Cabinet

'In whose interest?' - scenario overview

Aim of the scenario

view of council meeting 

The aim of the scenario is to explore the concept of pecuniary and non-pecuniary conflicts of interest for elected members in a Tasmanian local government context.

The scenario, set in the fictional 'Sunnyview Council', explores when councillors should declare an interest and when they should step out of a council (or council committee) meeting. The scenario also touches on a councillor's obligation to put community interests first - representing and serving the community through participation in council decisions.

The councillors' actions are not necessarily all 'wrong' and have been made somewhat 'grey' to encourage thought and debate.

Ethical issues and points to consider

As elected members, councillors are required to make decisions on a wide range of issues, some of which may raise conflicts of interest between the personal or private interests of councillors and their role in impartially representing their community.

Conflicts of interest can arise as a result of family connections, financial investments, business relationships and official roles in community organisations. While there is nothing inherently wrong with having a conflict of interest, any conflict needs to be appropriately managed.

Pecuniary conflict of interest is dealt with in Part 5 of the Local Government Act (1993); non-pecuniary conflict of interest is dealt with in a council's code of conduct. Councillors should primarily refer to these resources for guidance. Links to further information are provided at the end of the video.

Analysis of scenario

What ethical issues were raised in this scenario?

The video raises the issue of whether the private interests of each of the councillors involved in the council meeting constitute a conflict of interest that would need to be managed through the processes set out in the Local Government Act 1993 or the council's code of conduct processes. The video provides an opportunity for training participants to discuss whether the councillors concerned take the correct action in relation to participating in, or stepping out of, the discussion in the meeting.

Councillor Baker 

This is a screen shot from the video showing Coucillor Baker stating he may have a pecuniary interest in the council decision 

Councillor Baker implies that he may have had a pecuniary interest in the decision on the road upgrade because of a potential financial benefit to his bed and breakfast business. This would be dependant on the facts and circumstances of the particular matter under discussion. Part 5 of the Local Government Act requires a financial benefit or detriment to 'be received or likely to be received' by a councillor or a close associate as the result of the council's decision.

If Councillor Baker considers that he is likely to have a pecuniary interest in a matter, he should seek further advice prior to the meeting. During the meeting, if he has an interest, he should declare that interest prior to the discussion of this item and step out of the meeting for that item. He would also need to advise the General Manager in writing within 7 days of the declaration (which the General Manager will record in a register).

If Councillor Baker considers that he does not have a pecuniary interest, he may still need to consider whether he has a non-pecuniary interest, (a predisposition or bias toward a certain outcome based on a personal or private interest, including a relationship) under the council's code of conduct.

If Councillor Baker believes he has a pecuniary interest (or may have a pecuniary interest) he needs to declare this in the meeting – prior to any discussion. He may need to then remove himself from the discussion/ vote.

Councillor Jenkins 

This is a screen shot from the video showing Councillor Jenkins stating that she does not have an private interest in the council decision 

Councillor Jenkins utilises the road, in common with other road users. It is unlikely that she has a private interest that would constitute either a pecuniary or non-pecuniary conflict of interest.

Councillor Martin

This is a screen shot from the video showing Councillor Martin stating he has an interest in the council decision 

Councillor Martin declares an interest, but does not provide sufficient information in the council meeting to enable a determination of whether his 'interest' is a pecuniary or non-pecuniary interest.  A declaration of a pecuniary interest would need to be managed in accordance with the five-step process under Part 5 of the Local Government Act 1993. Alternatively, if he is declaring a non-pecuniary conflict of interest, he should only step out if required by the Council's code of conduct process.

Councillor Martin needs to be aware of his obligation to carry out his responsibilities as an elected member in participating in the council decision-making process. The fact that the decision may be controversial or unpopular is not a reason to remove himself from processes.

Councillor Roberts

This is a screen shot from the video showing Councillor Roberts confirming she has a conflict of interest in the council decision 

Councillor Roberts raises concerns that she has a conflict of interest because her mother owns property in the area. Again, this would be dependent on the facts and circumstances of the particular matter under discussion.

While her mother would be a 'close associate' for the purposes of s48 of the Local Government Act 1993, she would only have a pecuniary interest if her mother would, or would be likely to, receive a financial benefit or detriment from a particular outcome of the council's decision. Councillor Roberts could have a non-pecuniary conflict of interest under the council's code of conduct, if she has a predisposition or bias toward a certain outcome based on a personal or private interest (including a relationship).

It is important that Councillor Roberts recognises that her obligations under the legislation and code of conduct must take precedence over her desire to participate in the meeting to ensure a quorum. Breach of pecuniary or non-pecuniary interest requirements could result in a complaint to either the Director of Local Government or the Code of Conduct Panel respectively. Councillors have an obligation to make decisions impartially and in the best interests of the community as a whole. Participation in decision making with a conflict of interest impacts on council processes and the community's trust in those processes.

What resources could councillors refer to as a guide to managing their conflicts of interest?

  • The Local Government Act 1993
  • The Council's Code of Conduct
  • The Mayor or General Manager
  • The Local Government (General) Regulations 2005
  • The Local Government (Meeting Procedures) Regulations 2005
  • The Local Government Division
  • The Local Government Association of Tasmania