Part 3: How the contracting rule applies to candidates standing for election

3.1
In this Part, we explain how the contracting rule applies to candidates standing for election or appointment. In particular, we discuss:

• exceptions to the contracting rule as it applies to candidates; and
• the Auditor-General's role.

3.2
You cannot be elected or appointed to a local authority if you are concerned or interested in a current contract with that local authority that exceeds $25,000 at the time of the election. This contracting rule is the same as for existing members (see Part 2).

3.3
Every candidate should consider whether they might be ineligible under this rule. You should consider what contracts you have with the local authority in the financial year of the election and the value of payments to be made in that year.

Exceptions to the contracting rule

3.4
There are several exceptions to the contracting rule as it applies to candidates.²⁵

3.5
You will not be disqualified from standing for election or appointment if any of the following situations apply:

• Your obligations in relation to the contract have all been performed before the election or appointment, and the amount to be paid by the local authority has been fixed. It does not matter whether the amount has been paid, as long as the amount has been fixed.
• Your obligations under the contract have not all been performed before the election or appointment, but the amount to be paid by the local authority is already fixed (subject to amendments and additions as allowed for in the contract). It does not matter whether the amount has been paid, as long as the amount has been fixed.
• Your obligations under the contract have not all been performed before the election or appointment, but:
  • the term of the contract is 12 months or less; or
  • you relinquish the contract (with the local authority's consent) within a month of becoming a member and before you start to act as a member.

The Auditor-General's role

3.6
We cannot give approval for contracts between a candidate and a local authority. The Act does not allow us to do that.

3.7
If you are a candidate with an interest or concern in current contracts with the local authority that exceed $25,000 before the election, you cannot be elected (or appointed) unless the contract falls within one of the exceptions in the Act or you are no longer concerned or interested in the contract.

3.8
We can provide guidance to candidates to help them work out whether the contracting rule might prevent them from standing for election, and what their options are if that is a possibility. If your situation is particularly complicated, you might need legal advice.

25: Section 3(3)(f) and (g) of the Act.