Forced council amalgamations and the NSW government’s latest attempt at this via its Fit for the Future package has come under fire by a University of New England academic.
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UNE’s Centre for Local Government Professor Brian Dollery described the government’s policy of merging small councils as public vandalism.
The independent review panel’s final report offered three options for Walcha, Professor Dollery said – two amalgamation options and an “ill defined” Joint Organisation option.
“Amalgamation would be extremely bad news for Walcha,” he said.
Professor Dollery said he has examined data from councils forced to amalgamate by the Carr government in 2004 and found those councils were worse off than before the amalgamation. He said the smaller communities lost local representation, council staff and the income they generated but on the other hand the larger councils were no better off financially.
The amalgamated councils performed worse than the councils of the same kind that were not forced into a merger at that time.
“There is no evidence what so ever that amalgamation leads to lower costs or more efficiencies,” Professor Dollery said. “There is no evidence it leads to financial viability.”
He and colleague Dr Joseph Drew have looked at a number of councils and compared size with financial performance using the NSW government’s own treasury data.
“We can find no relationship at all between size and financial viability,” Professor Dollery said. “There is no reason to believe that would be any different here.
“The best approach to local government reform is process change, not structural change.”
That puts the responsibility back onto the state government to provide “sensible regulatory frameworks which encourage councils to
consult with their communities, engage in careful planning and reporting processes, and develop strategic plans and then monitor progress”.
Professor Brian Dollery, pictured, said the government’s criteria in its Fit for the Future package make it extremely difficult for a council to show it is financially sound.
“Councils are being ‘duded’ in the Fit for the Future process developed by the NSW government,” he said.
“The financial ratios and benchmark values included in the criteria have been deliberately modified for the original TCorp version to make it more difficult for councils to demonstrate their financial viability.”
He also says the level of compensation being offered to merging councils by the government isn’t anything like enough, especially for regional and rural councils.
Professor Dollery estimates that it costs rural councils about $8 million to merge, leaving the new entity with a huge debt to contend with.
Figures from Queensland suggest that metropolitan mergers can be even more expensive, with a price tag of around $9.3 million.
“This clearly shows that the initial costs of rural mergers are not far below the level of metropolitan councils and thus the NSW government should increase the amount available to councils,” he said.
