A material personal interest occurs when a matter before council (which is not an ordinary business matter) could have a financial impact on a councillor or their associates. An 'ordinary business matter' is defined in Schedule 4 of the Act (see legislation extracts).

Example of an ordinary business matter:

• setting rates and charges
• setting remuneration of councillors.

An example of a non-ordinary business matter is the awarding of council contracts.

A close associate of a councillor could be a:

• spouse
• parent, child or sibling
• partner
• councillor's employer (other than a government entity)
• or some person otherwise prescribed under a regulation.

A councillor has a material personal interest in a matter which is before council if they (or an associate) stand to gain a benefit, or suffer a loss, as a result of council’s decision on a matter.

For example, this could include voting to:

• award a council contract to a company owned by a councillor (or family member)
• award a council contract to a company which has, as its major supplier, a company partly-owned by a councillor (or his family).

However, it would not include voting on the ordinary business matter of increasing rates and charges in the local government area.

All potential conflicts of interest and matters of material personal interest relating to decisions before council (or council committees) must be disclosed (see Disclosing conflicts of interest). More examples are to be found in the department’s publication A guide to the Local Government Act 2009 for mayors and councillors.

Legislation extracts

• Local Government Act 2009 – s172 Councillor’s material personal interest at a meeting
  
  

  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. Note— See the dictionary for the definition of an ordinary business 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. (3) The councillor must— (a) inform the meeting of the councillor’s material personal interest in the matter; and (b) leave the meeting room (including any area set aside for the public), and stay out of the meeting room while the matter is being discussed and voted on. Maximum penalty— (a) if the councillor votes on the matter with an intention to gain a benefit, or avoid a loss, for the councillor or someone else—200 penalty units or 2 years imprisonment; or (b) otherwise—85 penalty units. (4) However, a councillor does not contravene subsection (3) by taking part in the meeting, or being in the chamber where the meeting is being conducted, if— (a) the councillor is a person to whom approval is given under subsection (5); and (b) the councillor is complying with all conditions on which the approval is given. (5) The Minister may, by signed notice, approve a councillor taking part in the meeting, or being in the chamber where the meeting is being conducted, if— (a) because of the number of councillors subject to the obligation under this section, conduct of the meeting would be obstructed if the approval were not given; or (b) it appears to the Minister to be in the interests of the local government area that the approval be given. (6) The Minister may give the approval subject to conditions stated in the notice. (7) The following information must be recorded in the minutes of the meeting, and on the local government’s website— (a) the name of the councillor who has the material personal interest, or possible material personal interest, in a matter; (b) the nature of the material personal interest, or possible material personal interest, as described by the councillor; (c) whether the councillor took part in the meeting, or was in the chamber during the meeting, under an approval under subsection (5).

• Local Government Act 2009 – Schedule 4, Dictionary – ordinary business matter
  
  

  Schedule 4 Dictionary ordinary business matter means: (a) the remuneration of councillors or members of a local government committee; or (b) the provision of superannuation entitlements or accident insurance for councillors or local government employees; or (c) the terms on which goods, services or facilities are to be offered by the local government for use or enjoyment of the public in the local government area; or (d) the making or levying of rates and charges, or the fixing of a cost-recovery fee, by the local government; or (e) a planning scheme of general application in the local government area; or (f) a resolution required for the adoption of a budget for the council; or (g) a matter that is of interest to a person merely as— (i) an employee of the State or a government entity; or (ii) an elector, ratepayer or resident of the local government area; or (iii) a beneficiary under a policy of accident insurance, public liability or professional indemnity insurance held, or to be held, by the local government; or (iv) a user of goods, services or facilities supplied, or to be supplied, by the local government (whether under a contract or otherwise) as a member of the public in common with other members of the public; or (v) a candidate for election or appointment as a mayor, deputy mayor or member of a committee of the local government; or (vi) a member of a non-profit, charitable or religious organisation involving no personal financial gain or loss to the person.