Councillors sometimes have to deal with personal conflicts between serving the overall public interest of the community and their own private or business interests.  The community's expectation is that councillors will act ethically and demonstrate high standards of propriety in making well-informed decisions for the public good.

The Local Government Act 2009 (the Act) establishes a framework designed to provide a local government system that is accountable, effective, efficient and sustainable.

Under section 12 (6) of the Act, local government councillors must serve the overall public interest of the whole local government area. In the event of a conflict between the public and private interests of a councillor (or an associate) the public interest mustprevail. Councillors cannot gain any financial or personal advantage in undertaking their role.

Sections 172,173 of the Act defines two types of private interest which councillors must disclose at meetings: material personal interest and conflict of interest.

Material personal interests involve the possibility of financial gain or loss for the councillor or associated person.

The scope of a conflict of interest is broader and includes interests that arise from personal or family relationships or from involvement in sporting, social or cultural activities.

The figure below compares the variation of scope between the broader conflict of interest and the more defined material personal interest. Each councillor has an obligation and a responsibility to report and manage their private interests.

Private interest: conflict of interest, or material personal interest?

Local Government Act

• 12 Responsibilities of councillors
  
  

  (1) A councillor must represent the current and future interests of the residents of the local government area. (6) When performing a responsibility, a councillor must serve the overall public interest of the whole local government area.

• 172 Councillor’s material personal interest at a meeting
  
  

  (1) This section applies if— (a) a matter is to be discussed at a meeting of a local government, or any of its committees; and (b) the matter is not an ordinary business matter; and (c) a councillor has a material personal interest in the matter. (2) A councillor has a material personal interest in the matter if any of the following persons stands to gain a benefit, or suffer a loss, (either directly or indirectly) depending on the outcome of the consideration of the matter at the meeting— (a) the councillor; (b) a spouse of the councillor; (c) a parent, child or sibling of the councillor; (d) a partner of the councillor; (e) an employer (other than a government entity) of the councillor; (f) an entity (other than a government entity) of which the councillor is a member; (g) another person prescribed under a regulation.

• 173 Councillor’s conflict of interest at a meeting
  
  

  (1) This section applies if a matter is to be discussed at a meeting of a local government, or any of its committees, and a councillor at the meeting— (a) has a conflict of interest in the matter (the real conflict of interest); or (b) could reasonably be taken to have a conflict of interest in the matter (the perceived conflict of interest). (2) A conflict of interest is a conflict between— (a) a councillor’s personal interests; and (b) the public interest; that might lead to a decision that is contrary to the public interest. (3) The councillor must deal with the real conflict of interest or perceived conflict of interest in a transparent and accountable way.