Tweed and Lismore councils have welcomed a state government plan that offers struggling metropolitan and regional councils financial incentives to merge with their neighbours, even though council mergers are not guaranteed to produce budgetary savings.
In a new announcement on Wednesday, the NSW government said it was not ruling out forcing local councils to merge, but hopes funding sweeteners will be enough to convince them to amalgamate.
As part of the government’s so-called Fit for Future package, Premier Mike Baird committed $258 million in incentives for the state’s 152 councils to merge.
Councils in the Greater Sydney area could get up to $22.5 million each for merging, whereas regional councils would get just $13.5 million.
Mr Baird says more than a third of the state’s councils are facing financial problems and will need help to join forces with neighbouring councils.
‘Clearly there needs to be less councils,’ he told reporters in Sydney.
Current NOROC president, Tweed mayor Barry Longland and his predecessor Lismore mayor Jenny Dowell are in agreement about the need for mergers, with Cr Longland calling the incentive payments ‘substantial’ and Cr Dowell admitting she had already been in ‘blue sky’ talks with Kyogle Council about a possible merger.
An earlier report issued by former local government minister Don Page highlighted Kyogle Council as one that would be in significant financial straits if it did not find a merger partner soon.
It recommended Kyogle merge with either Lismore City or Richmond Valley Council.
But Kyogle mayor Danielle Mulholland, together Richmond Valley mayor Ernie Bennett, Ballina mayor David Wright and Byron mayor Simon Richardson have so far been silent on the prospects of a merger.
Similarly Cr Longland would not be drawn on the prospect of a Ballina/Bryon/Tweed mega council, telling local media simply that there were ‘lots of options to be considered.
But he said overall that he was happy with the package, ‘particularly the funds which will be made available to councils to assist with preparing for and implementing the Fit for the Future reform agenda’.
Cr Longland said in a statement that it provided ‘a once-in-a-lifetime opportunity for the sector to reform itself with support from the state government, so that future generations will have the infrastructure and service delivery to provide for prosperous communities.’
‘Like the government, we want our community to have confidence that their council is financially sound, operating efficiently and in a strong position to guide community growth and deliver quality services.
‘It is great to hear that the government will provide assistance and support to councils to help them achieve these important outcomes.
‘In particular, we welcome the potential savings for councils when they invest in local infrastructure, the funding to get new regional Joint Organisations up and running and the benefits for councils through reductions in red tape and duplication,’ Cr Longland said.
He added that as president of NOROC, he was keen to explore ‘all regional opportunities with our partners and ensure we continue to build strong regional collaboration in the northern rivers.’
‘The elected councillors of the Tweed and staff will be actively working, both locally and with our regional neighbours, to explore the opportunities these reforms present and will complete a proposal by 30 June next year,’ Cr Longland said.
‘Naturally, this process will involve community consultation so we can work together to ensure we maintain strong local communities into the future,’ he added.
Forced mergers not ruled out
At yesterday’s press conference launching the move, Mr Baird was asked if he would consider changing former premier Barry O’Farrell’s policy of not forcing councils to merge should his funding plan not be widely taken up.
‘If we get to the end of the process and councils aren’t there and they’re not fit for the future, well we have to consider what options we can work with them,’ he said.
‘Because it is clear that the current position is not sustainable.’
Mr Baird was also asked if the amalgamations might lead to job cuts.
‘I expect as part of this process there will be less people picking up pencils and more people fixing up local roads,’ he said.
The package was welcomed by the president of Local Government NSW (LGNSW), Cr Keith Rhoades, who said the organisation had been ‘actively involved in the review process from the beginning, and we are pleased the government listened to LGNSW’s calls for a greater incentives package to help councils navigate the reform process.’
‘The government’s package is consistent with about 75 per cent of LGNSW’s submission to the Review Panel report on behalf of NSW councils,’ he said.
He welcomed that there will be no forced amalgamations and added LGNSW would ‘be a focus’ of the LGNSW annual conference next month.
‘Amalgamation by stealth’
But the state Labor opposition has savaged the move.
Shadow local government minister Sophie Cotsis said the Fit for the Future policy was ‘nothing more than forcing the amalgamation of councils across NSW by stealth’.
‘The Liberals are setting in place a framework that will force the amalgamation of councils across NSW – there is no choice for councils other than putting forward amalgamation proposals now or being forced to later,’ Ms Cotsis said.
‘The devil in this policy is in the details – the $1 billion in funding is accounting trickery and councils are being put on a path to having no choice but amalgamation,’ she added.
Ms Cotsis said the government ‘had over three years to talk to local communities about their vision for local government in NSW but they palmed the responsibility off to a panel and now with the election clock ticking down have rushed out this policy to get them past the next election.’
‘Local communities can have no confidence that the Liberal Government is acting in good faith or in their best interests.
‘Mike Baird let the cat out of the bag in his press conference when he said that ‘we will have to look at other options’ if local councils don’t sign up to the government’s amalgamation policy.
‘Mike Baird must come clean about the $1 billion he claims to be providing for this policy – more than 70 per cent of this figure is accounting trickery in “cuts to red tape” and cheaper interest rate loans to local councils.
As part of the plan the government is offering councils cheaper loans, which it says could save them up to $600 million, and reductions in red tape – estimated to save up to $100 million.
Mr Baird says the reforms will help councils reduce rates and deliver much-needed infrastructure.
Councils will have until June 2015 to decide if they will merge and take up the government funding.