The Local Government Amendment (Rates—Merged Council Areas) Bill

The Local Government Amendment (Rates—Merged Council Areas) Bill

(Contribution to Debate, 29 March 2017, Legislative Assembly, NSW Parliament) 

The Local Government Amendment (Rates – Merged Council Areas) Bill will give the Minister for Local Government the power to require a council that was established through a recent amalgamation of local government areas, to continue the same rate paths that were used by the former council areas, over the next three years. During this three year period, rates will reflect what they would have been under the former standalone council.

Generally, I do not support rate pegging however I will support the bill because if the proposed amalgamation of Woollahra Municipal Council with Waverley and Randwick councils proceeds, my constituents in Paddington, Woollahra and Edgecliff will suffer from considerable and unfair rate increases.

This bill has had to come about because the government has pursued council amalgamations out of ideology without any regard for community benefit. 

After promising in the lead up to the 2011 election not to force councils to merge, the government has pushed amalgamations regardless of what councils and the communities they represent want.

Communities across the state expressed in submissions, surveys and polls, strong support for their existing local councils and concern about being subsumed into mega councils.

So the government promised to only force councils that are not ‘fit for the future’ to amalgamate, but it introduced a definition for ‘fit for the future’ based on population sizes that most councils could not meet within their existing boundaries.

Councils including Woollahra Municipal Council were assessed fit on all criteria – sustainability, infrastructure and service management, and efficiency – but because they were not large enough, failed the ‘scale and capacity’ criterion and were deemed unfit.

The government held a sham consultation process without releasing the KPMG report that provided the modelling for its boundary decisions and savings claims. This prevented councils and the community from assessing the modelling and responding in any meaningful way.

As unpopularity of forced amalgamations grew, the desperate government upped its claims that mergers were all about getting a better deal for ratepayers who would reap massive savings through reduced rates.

These claims were false: there was no way that the government could make such guarantees.  And of course assessments have shown many examples where ratepayers are expected to pay more under the proposed mergers.

Woollahra council has identified rate increases of up to 53 per cent for its ratepayers if the council is merged with Randwick and Waverley councils because of its significantly higher land values. This has been verified by an independent audit and acknowledged by the Independent Pricing and Regulatory Tribunal, which refers to the concern as the ‘Woollahra Issue’.

Woollahra council is concerned that IPART’s report did not identify a solution that would protect Woollahra ratepayers in the long term. Proposals to allow councils to set rates on either unimproved land value or capital improved value provide no guarantees, particularly given the data on capital improved value is not available to assess.

Further, IPART proposes that only a ‘community of interest’ could be subject to a different rating system and its definition for ‘community of interest’ does not appear to apply to Woollahra council ratepayers.

If Woollahra council’s court action to prevent its amalgamation with Waverley and Randwick is not successful, in three years, its ratepayers will likely pay much higher rates while having lost grassroots representation and local expertise, and having to deal with bigger bureaucracies and disruptions.

The government has taken a heavy handed approach to council amalgamations and it will be to the detriment of strong, sustainable communities.

Local government is the level of government closest to the people and local councils are best placed to understand and address the unique challenges of communities and neighbourhoods.

The recent Court of Appeal decision in favour of Kur-ing-gai council’s argument that the government’s process for forced council mergers has been unfair and unlawful should encourage the government to go back to the drawing board and refocus reforms on strengthening councils’ long term sustainability and financial viability within existing boundaries. These reforms should include removal of rate pegging, as recommended by the Independent Local Government Review Panel.

People don’t want mega councils and are not bought by false promises of minor rate reductions – clearly that was a furphy otherwise this bill would not be needed – what people want is high quality services and programs that are sensitive to the distinctive needs of their neighbourhood.

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