Local Government Amalgamations

Local Government Amalgamations

(Motion, 14 May 2015, Legislative Assembly, NSW Parliament)

I move:

That this House opposes forced amalgamations of councils that are financially sustainable and have the support of their communities.

Councils play an essential role in creating attractive, prosperous, healthy and sustainable places to live, work and do business. Their roles go well beyond roads, rates and rubbish to cover also planning, heritage, late trading, parks and open spaces, sports and recreation, art, child care, public space, lighting, noise, companion animals and libraries, to name a few. Local government is the level of government closest to the people, which is important because each community neighbourhood is unique with diverse needs that their councils must understand in order to serve. 

Changes to local government must be about building capacity to ensure that councils can continue to deliver high quality services and programs into the future. The Government is set on merging boundaries and creating super councils, despite significant disruptions, loss of representation and strong opposition within communities. Mega councils will make it hard for grassroots local representation and locally specific or targeted services. Residents and ratepayers will have less access to decision-makers and fewer opportunities to contribute to policies.

Bigger councils will not necessarily improve efficiencies. Economies of scale do not always work. Large organisations need more administration and management resources, and larger bureaucracies can be less efficient. Indeed, forced amalgamations would create mega bureaucracies at a cost of local democracy. Mergers have short-term costs and disruptions as councils combine staff, planning controls, rating categories, services and information technology systems. Conflicts between different work cultures can reduce productivity. There is no evidence that merging two financially weak councils will create one that is economically sustainable and delivers the same or better service. There are real risks that financially strong councils could become less sustainable if they merge with weaker ones. Larger councils may not provide better services either. Big councils will not be able to cater for specific neighbourhoods as policies and rules are standardised and local expertise is lost.

Amalgamations are not necessary. The Independent Local Government Review Panel made other recommendations to secure the financial viability of councils, such as allowing them to raise revenue and borrow money as well as reforming rate pegging, most of which had broad support from New South Wales councils. The Government should implement these recommendations before the idea of forced amalgamations is even considered. Councils should be encouraged to share services where it is appropriate and it will save money—most already do this through individual agreements and regional bodies. Even Professor Graham Sansom, who headed the review, stated that focus on amalgamations has been overstated and that all metropolitan councils should become financially sustainable in their existing boundaries.

But the Government appears intent on pushing ahead with its amalgamation agenda. Councils have until 30 June to argue their case against proposed mergers and, if the Independent Pricing and Regulatory Tribunal [IPART] disagrees with their argument, they could be merged forcibly. But how will the IPART determine councils' viability? IPART has identified four criteria that it will consider: scale and capacity; sustainability; infrastructure and service management; and efficiency. Scale and capacity is a threshold criterion that would set population targets and which the Minister indicates is about making councils bigger.

There is no benchmark for social and community outcomes, yet much of what councils do—and what their communities expect of them—is not for profit; in fact, it provides where the market fails. Child care is such a perfect example. In rural areas the market will not provide services because it is not profitable, and in city areas market services are unaffordable for many. Sometimes this means that services must be provided at a loss. Omission of social and community benefits from evaluations devalues what councils do and puts vital services at risk. Councils will have to make their case starting from the position of proposed amalgamations—a process clearly stacked in favour of establishing mega councils.

It seems that the Fit for the Future process has been a farce so that the Government could claim it consulted and assessed. Councils do not want to merge, communities do not want mergers, and all other proposals to help councils' viability have been ignored. Now the final process will focus on the balance sheet in a way that will deliver the Government's preferred outcomes—mega councils. A heavy-handed approach could put the Baird Government on the same foothold as the Kennett and Newman governments, whose communities saw them as arrogant. Many say Jeff Kennett lost the 1999 election partly because of his massive and undemocratic changes to local government. Victorians are still angry at how their communities and services were decimated in the process. The New South Wales Government should not dismiss how important this issue is to the people of New South Wales and the anger that will result if amalgamations are forced here.

Of great concern is that the Government is pursuing super councils while doing nothing to remove or reduce opportunities for corruption and undue influence in local government. Local government poses risks of corruption and undue influence, with council decisions able to deliver significant financial profits to individuals as well as permanent negative community impacts. Such risks have been identified and exposed extensively by the Independent Commission Against Corruption. Changes to and reviews of State election funding have occurred but nothing has been done to reform local government election funding, which has considerably more lax rules including no caps and inadequate disclosure requirements. If we end up with amalgamated councils, it will ultimately lead to bigger election campaigns at the local level, increasing the need to raise funds. I have asked the Premier to task the Expert Panel on Political Donations to assess necessary local government election reforms.

We are yet to see a cost-benefit analysis showing the financial benefits of mega councils, and this must be delivered before long-lasting and potentially detrimental changes are made. Social impact assessments must be made available. Amalgamations are opposed by councils across New South Wales and this reflects their communities' opposition as identified in consultation. Yesterday I met with mayors and councillors from Temora, Coolamon, Gundagai and Junee shires—local government areas that oppose being amalgamated. They are worried that widening council boundaries will increase the remoteness of many communities and reduce their representation. They believe the focus on amalgamations is indeed political. [Extension of time agreed to.]

In the inner city there is a long history of politically motivated boundary manipulations aimed at getting the government of the day's mates in charge of town hall. This Government has also manipulated City of Sydney elections by doubling the vote of big business and corporations, and empowering councillors to remove voting options on polling day. More broadly, the Government gave itself sweeping powers to impose orders on or to sack councils it claims are underperforming. The Government has shown its contempt for the fundamental principles of democracy at the local level; no wonder many in the community are worried about future plans.

In my electorate the Government plans to merge the boundaries of the city, Randwick, Waverley, Woollahra and Botany councils. This new super council would have a population greater than that of the State of Tasmania. The disruptions would be enormous to what are now sustainable and supported councils. There can be no justification for merging any council that is financially sustainable and whose community does not agree to an amalgamation. A forced amalgamation should be considered only as a last resort after implementing other measures to help those councils that are struggling financially. I was pleased to join representatives of Labor, The Greens, the Christian Democratic Party and the Shooters and Fishers Party in a press conference three days before the election, opposing any forced amalgamation—and I hope that their resolve stays strong. I call on all members of the Opposition to oppose any proposal that will force councils to merge their boundaries.

Read the debate HERE

In reply:

I thank the members who contributed to this debate—a vocal and interesting one. I thank the Minister for Local Government and the members for Fairfield, Parramatta, Balmain, Drummoyne, Charlestown, Newtown, Kiama and Castle Hill. This was an interesting debate. It was interesting to hear the Government come out in support of forced amalgamations, but to then—at the last minute—seek to amend the motion to return to the vanilla position that was taken to the electorate in which Government members refused to answer questions about their intention of forced amalgamations. I thank the member for Newtown for amending the Government's amendment so that in the first vote after I have spoken, we can have members move to the side of the Chamber that represents their stance on forced amalgamations.

Forced amalgamations are a method by which the Government may impose itself on local government, rather than address the real concerns of local government reform, allow local government to raise revenue, to borrow and to reform rate-pegging. We need local government reform, but it should not be undertaken by State Government imposing itself upon local government. Forced amalgamations are likely to lead to disruption of services and are expensive. Amalgamations will potentially lead to rate increases, but most importantly they will lead to a loss of local representation and a loss of local democracy. The member for Lake Macquarie stressed also the loss of sense of community that may result. Local government has been the plaything of State Government for too long.

Its boundaries are subject to stacking, mergers and de-amalgamations for State Government political advantage. I share the widespread community concern that local government should, once and for all, be recognised in the Constitution so that it ceases to be beholden to the government of the day, with democracy protected. Local government can be improved and if the Government is sincere in achieving this, it would start the process by implementing Independent Local Government Review Panel recommendations such as the removal of rate-pegging. Amalgamations are not necessary and create the risk of lost services, increased costs and reduced representation. Amalgamations should not be imposed on sustainable councils. I commend the amendment to the Government's amendment, which opposes forced amalgamations. 

View vote results HERE.

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