NSW Nationals dump support for council mergers before leadership spill

By Julian Bajkowski

Friday January 20, 2017

The NSW Nationals have publicly spilt with their Coalition partners the Liberals over the politically vexed issue of forced council mergers in the state less just a day after Premier Mike Baird announced his resignation.

The public repudiation for the forced council mergers, which had been one of the Baird government’s most contentious and electorally toxic policies, opens the door for a wind-back of the policy and the likely jettisoning of Local Government Minister Paul Toole from the portfolio.

Vowing that unwinding mergers would be one of the first orders of business for future NSW Coalition government discussions, NSW Nationals leader John Barilaro said it was “time to draw a line in the sand over council amalgamations.” He added:

“The policy of local government amalgamations has impacted 20 councils, 12 of which are in regional NSW causing uncertainty and anger, and others are locked in costly legal action – that all stops today.”

The Nationals’ public opposition to the forced council mergers from within government now puts the remainder of metropolitan and regional amalgamations in a precarious position because whoever succeeds Mike Baird would have to justify why some communities were spared mergers and other were not.

It also puts all parts of the state bureaucracy that intersect with local government — ranging from planning to transport to community services — in the unenviable position of trying to predict which way the cards will fall as they implement policy.

Most NSW local governments emphatically opposed the forced council mergers process, not least because it meant elected representatives were being asked to sack themselves and limit their own political career prospects.

NSW Labor was a fierce critic of the way the forced merger process was implemented but has long harboured its own ambitions to substantially reduce the number of councils, by force if necessary.

The Local Government Association of NSW, the peak representative body for councils in the state also vehemently opposed the forced merger process and is likely to take the National’s public opposition to amalgamations as a major win for their cause.

LGNSW President Keith Rhoades immediately applauded the ultimatum the Nationals had issued to their Coalition partners. Rhoades said:

“These communities are absolutely irate about forced amalgamations, and the proof was obvious at the Orange by-election.

“I would remind the Coalition Government as a whole that it is not just regional communities that are fighting forced amalgamations with everything they have.

“And it’s not just the inner city either.

“Local metropolitan communities are equally as passionate about having a real say in their neighbourhoods and their day-to-day lives.”

Rhoades said this had been demonstrated “time and time again, not just by the court challenges still outstanding but by the collapse of the Liberal vote in Western Sydney and, before that, North Sydney.”

In May 2016 the Baird government slashed 45 councils down to just 19, with many amalgamations occurring face of strong community opposition and protests.

Another 23 councils that were to be hacked down to just nine went to court to legally resist and delay the amalgamation push — a long-game move that may ultimately have pay off for the holdouts that conspicuously included ratepayer and Prime Minister Malcolm Turnbull’s Woollahra as well as Mosman, Ku-ring-gai, Hornsby, Hunters Hill, Lane Cove, Ryde, Burwood and Strathfield.

Ironically, some of the stiffest opposition came from blue ribbon conservative neighbourhoods that feared a loss of local identity and the imposition of faceless ‘big government’.

Despite an assessment by the Independent Pricing and Regulatory Tribunal’s that NSW council mergers could save $2 billion over 20 years — a figure many on the right of the Liberals privately found painfully thin — the financial case for mergers has always been on shaky ground.

A substantial problem largely glossed over in the race to make amalgamations happen was the assumption that merging as many as three councils into one would automatically produce savings without fully taking into account integration costs.

A leaked confidential KPMG report to Cabinet rated the potential for cost blowouts from information technology systems integration during council mergers as high risk, but neglected to put a dollar estimate on the potential costs.

A major issue for merging councils is that many run disparate management systems across core functions that span across financials, payroll, HR, records management, procurement, contract management and asset management as well as a myriad of other administrative functions.

The loss of corporate memory is another yet to be estimated factor.

One opportunity for a recalibration or pause of the merger process already underway would be to gradually standardise councils’ systems, a move that potentially could provide a far clearer and more timely insight for the state government into local governments’ activities.

NSW Finance Minister Dominic Perrottet, who is tipped to become Treasurer after forging an alliance with leadership candidate Gladys Berejiklian, has previously welcomed the prospect of the local government sector accessing the states pre-approved supplier panels as a way to save money after pushing through major procurement reforms at a state level.

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