Stephen Mayne: why NSW council amalgamations are well overdue

By Stephen Mayne

Monday December 21, 2015

New South Wales councils are complaining bitterly, but Premier Mike Baird (pictured) is right to push ahead with forced amalgamations given the lack of local government scale in Australia’s biggest state, especially compared with its nearest rivals, Victoria and Queensland.

A reduction from 152 councils to 112 will still leave NSW with 33 more councils than Victoria’s 79.

However, the NSW process has clearly been politicised as it makes no sense to retain a single suburb council like Mosman, which is full of rich, powerful and parochial Liberal voters, while reducing the overall number in Sydney from 43 to 25.

Former Victorian premier Jeff Kennett said very little about local government reform when in opposition, then promptly sacked all 210 councils for three years between 1994 and 1997 and redrew the boundaries to create 78 larger entities.

Democracy was suspended as hand-picked “commissioners” were appointed and then a system of compulsory competitive tendering was rolled out along with forced rate cuts of almost 20%, which was only possible courtesy of almost 10,000 job losses and cuts in infrastructure spending.

The Sydney Morning Herald made the following claim on Saturday about Baird’s reform program:

“The measures that seek to deliver up to $2 billion in savings echo the reforms that contributed to the downfall of Jeff Kennett in Victoria.”

Truth be known, Kennett was re-elected in a landslide in 1996, two years after forcing through the amalgamations. Local government reform was one of Kennett’s best achievements and he remains a respected authority on the subject.

Even leading ALP Left figures such as Lindsay Tanner have gone on the record saying the Kennett reforms “were brutal but they were right”.

The NSW government’s promise to save $2 billion a year will be a stretch, particularly if there are guarantees of no job losses for the first three years.

Rate-capping was introduced in 1979, so NSW councils have significantly higher local government debt and lower rates than their Victorian counterparts. There is also a much bigger infrastructure backlog that needs to be addressed with rate rises, although these have been ruled out as part of the merger process.

“If Sydney successfully reduces to 25, there could be a move to get Melbourne below 20.”

There are usually complications, injustices, winners and losers with council amalgamations. Merging a low-debt council with its high-debt neighbour will always cause controversy, especially where service standards are not comparable or infrastructure is failing.

Western Australia Premier Colin Barnett failed to deliver meaningful local government reform last year because he wasn’t prepared to force the issue. Few people ever voluntarily give up power, especially elected politicians. This has left the City of Perth as something of a small joke with just 8000 residents, compared with 120,000 in the City of Melbourne.

City of Sydney is bigger again with 180,000 residents, but the key independent adviser on the NSW reforms, Professor Graham Sansom, has slammed the proposal not to create a bigger capital city council.

City of Brisbane remains the gold standard for council scale in Australia with over 1 million residents as it covers almost half of greater metropolitan Brisbane.

Kennett has been highly critical of the timid Barnett reform process in WA. He also stuck his head up recently, calling for another round of council mergers in Melbourne so that a re-elected lord mayor Robert Doyle could play in a bigger paddock, rather than just leading one of 32 councils in greater Melbourne.

If Sydney successfully reduces to 25, there could be a move to get Melbourne below 20. It is bizarre that Tiger Woods could hit a driver from the steps of Victoria’s Parliament House into the City of Yarra, which starts on the corner of Nicholson Street and Victoria Parade, just beyond the ICI building. Similarly, why on earth is St Kilda Road beyond Dorcas Street, City of Port Phillip on the western side and City of Melbourne on the East? It should be one singularly governed iconic Melbourne boulevard.

Victoria, in spite of moves in Melbourne and Geelong, is behind every other state that has moved further on the question of attracting quality and respected local leadership through directly elected mayors. Annual mayoral elections are a destabilising form of governance and the current reform program in Victoria is expected to move to a minimum of two-year terms for mayors before transitioning to communities having the option of going with the directly elected model.

The biggest skill-set councillors lack is a business background, and this is largely because the money is so bad and business people don’t enjoy the scrutiny or the endless compromising in politics.

It is shame that your typical professional director doesn’t view local government as a creditable position in any good portfolio of board seats, which could comprise a not-for-profit, a public company, a private company and one council.

For this to happen, we need the Baird government to give councillors meaningful pay rises as part of the amalgamation process.

The City of Melbourne has the best paid employees of any council in Australia, with 157 earning more than $136,000 in 2014-15, largely because the top band in the current enterprise agreement has dozens of staff who, come January 1, will be earning more than $150,000.

The City of Melbourne administration has made a comprehensive submission to the current review of Victoria’s Local Government Act, which was made public on Friday. It has lots of interesting suggestions, but didn’t venture into the sensitive territory of addressing the poor level of pay for elected councillors in Victoria, or whether the state needs another round of amalgamations.

This article was first published at Crikey

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