Thanks for your question.
Local councils are not mentioned in the Australian Constitution, which means that they are not under the authority of the Australian Parliament. Local councils are created by state parliaments who decide on local councils’ powers and responsibilities. The federal government cannot decide on or reduce the powers of local councils. It is possible for the states to transfer some of their powers to the federal government, so a state could take an area of responsibility away from that state’s local councils and give it to the Australian government, but this is would be very unusual.
The federal government can influence the work of local councils. It may choose to work with local councils and provide money for particular projects (such as building local sports facilities), but this does not involve changing the powers of the local council.