Local council amalgamations long over due

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Sydney Metro Diagram on Council Amalgamations, Source – IPART report into local councils Local council amalgamations already done in Victoria and Queensland, with New South Wales very slow and rigid, when it comes to modernising local councils into the 21st century, with financial viability, planning and service delivery.

New South Wales has approx. 152 councils (approx. 46 in Sydney), comparable to approximately 78 in Victoria and approximately 74 councils in Queensland

Some 152 councils in New South Wales, with smaller out of date councils formed in the 19 century, served its purpose long ago in another era, but not viable 21st century for financial, planning and services delivery. The writer done research and published article in Sydney Morning Herald, some 18 years ago, wrote about the Victorian experience. “Kennett Showing Way”, Sydney Morning Herald, 18/04/1997, Page 67, the article researches how the then Victorian Premier, Jeff Kennett, cut 210 local councils in Victoria, down to 78, making a savings of $400 million per year our of council administration costs and giving Victorian a reduction in their council rates, of average 20%. It has the writer’s proposal some 18 years ago, to reduce the councils in Sydney, from 45, to 15.

The New South Wales Independent Pricing & Regulatory Tribunal (IPART), recently conducted a review into local councils in New South Wales, to assess local councils to see if they are fit, by demonstrating they have sufficient scale, capacity and are financially sustainable. Approx. 87 council were found to be “unfit”, approx. 60 were assessed as not having sufficient scale and capacity and approx. 18 councils were assessed as not having the financial criteria. Approx. 9 council were assessed as not having either, scale/capacity or the financial criteria. This means, approx. 43% councils in New South Wales are “fit” to be viable for the future and approx.

57% councils needs to council merger with neighbouring councils, to be viable for voters, ratepayers and taxpayers for the future. The IPART review used independent economic consultants, Ernst & Young, to help assess each council’s fitness. Some of the rural councils, in regional New South Wales, will not be viable in the coming years, with declining populations, falling below 10,000, which is not financially and service delivery viable.

The IPART report into local councils, in summary of the 496 pages, the review of each council’s fitness for the future considered the strength and effectiveness of local government in providing services and infrastructure that communities need, with its financial viability. The NSW Government with the IPART review asked that councils which are assessed as fit will have access to a range of benefits including a streamlined rate variation process, a State Government borrowing facility, priority for other government funding and grants, and eligibility for additional devolved planning powers. Funding will also be provided by the NSW Government to assist with the transitional costs of merging, establishing regional Joint Organisations (JO), and assisting regional and rural councils.

The assessments will now be considered by the NSW Government in determining the next stage of the reform process. The state government is giving the “unfit” local councils till 18th November to respond and their proposals on mergers with neighbouring councils, before the state government under the Local Council Act provisions, can proceed with such mergers, before local council elections due September 2016, with a possibility of delay in the local councils elections timetable.

Local Government Minister, Paul O’Toole MP, says “he is all ears to the “unfit” local councils, to have inform discussions, to make best amalgamation outcome for their communities”. However,  New South Wales Local Councils Association President, Keith Rhoades, says “giving these unfit council only 20 workings days to provide a response since the IPART report is handed down is unfair, likely Kempsey Council, to prove themselves to be viable fit or time to consider and put forward their own preferred amalgamation or joint councils authority response”.

The timetable on the local council amalgamations will be determined soon to see if this is adequate or timing, or the state government allows more time to considered best options forward. Premier Mike Baird states “There is no doubt that if we have less councils, we have hundreds of millions of dollars that can be put to work for our ratepayers”.

The state opposition’s position is for voluntary amalgamations, not forced amalgamations. When Labor was in government, with Premiers Bob Carr and Morris Iemma, New South Wales councils reduced from 176 down to approx. 152, with three councils merged in the Central Coast, to form the Bathurst Regional Council, with Drummoyne and Concord in Sydney merged to form Canada Bay Council. Labor is calling for certain occupations, such as developers, be banned from running and being election to local councils.

Also, to have a cap on political donations involving local councils. Opposition Leader Luke Foley states “If the Premier is serious about reforming local government he should legislate for caps on political donations in line with those that apply to state government. It is the right thing to do.”

“These are commonsense reforms that would go a long way to restoring the community’s trust in local government and Labor welcomes the fact that it has received the committee’s bipartisan support.”

The New South Wales is yet to make a decisions with provisions of the Local Council Act, a guestimate on the scenarios, from the IPART Report is as follows –

Randwick and Waverley council in the Eastern Suburbs will be merged.

Auburn, Burwood and Canada Bay like to be merged as the “Olympic Park” inner west local council.

North Sydney, Mosman, Lane Cove, Willoughby, Hunters Hill and Ryde likely to be merged as a “Northern Sydney” Council.

Manly, Warringah and Pittwater to merger as a “Northern Beaches” Council.

Hornsby and Ku-ring-gai Council to merge.

Parramatta City Council to remain alone, likely with expanded territory from neighbouring councils, such as Holroyd, which might include southern part of The Hills and western part of Ryde.

City of Sydney and Woollahra Councils likely to merge.

Ashfield, Leichhardt and Marrickville Councils likely to merge.

Liverpool and Fairfield Councils likely to merge.

Hurstville, Canterbury, Rockdale & Kogarah Council likely to merge as a “Southern Sydney” Council.

Bankstown likely to remain as one council.

The outer Sydney Metropolitan Councils of Blacktown, Blue Mountains, Camden, Campbelltown, Hawkesbury, The Hills, Penrith, Sutherland Shire and Wollondilly, all likely to remain as single councils.

Camden and Campbelltown might join in with Liverpool and Fairfield.

Two local council fighting amalgamations, Strathfield and Holroyd. Strathfield fights to stand alone, but their preference is to join the Inner West “Olympic Park” local council.

Holroyd likely to force in merge with either Parramatta or Blacktown. Botany Council, another council, likely to merged with either Randwick/Waverley or with the new Southern City Council.

In regional New South Wales, Gosford and Wyong, to merge to form a single Central Coast Council, who both currently share local water resources and infrastructure.

A number of council around Newcastle will merge to form a “Hunter” local council, likely to include Lake Macquarie and Port Stephens.

Down south, Wollongong, Shellharbour and Kiama likely to merge as the “Illawarra Council”.

Numerous non-metropolitan council across the state, will merge 3 to 6 together, who share regional resources and infrastructure.

From the IPART report assessment, initial look at the proposed Inner West “Olympic Park” local council, to include Auburn, Canada Bay, Burwood and Strathfield, those four councils, merged as one, would be approx. $114 million better off. Amalgamation models of local council looked by the IPART report, is to show Net Present Value (NPV) benefits to the community, of the savings from council administration costs, that can be freed up for local services and infrastructure. There also options of rate reductions and better remuneration for elected councillors, to be looked at, as part of the local council amalgamations process.

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