Image: Patrick.
While Victoria is celebrating its success at keeping rate rises at its lowest in ten years, it’s a completely different story emerging in New South Wales.
At a NSW Parliamentary Inquiry into Local Government Reform, peak body association Local Government NSW (LGNSW) warned that claims by the Mike Baird government that forced council amalgamations would drive down rates was not supported by evidence from other states.
Leading the charge against the Baird government’s claims, the President of LGNSW Keith Rhoades was giving evidence at the Inquiry, which is examining the state government’s Fit for the Future reform proposals, which will dramatically reduce the number of councils in NSW through amalgamation.
Mr Rhoades said amalgamations had actually driven rates higher in other jurisdictions, including Queensland and Victoria.
The Victorian amalgamations took place in the 1990s under the Jeff Kennett government, of which MAV President Bill McArthur was highly critical – and the Queensland amalgamations were implemented in 2008, which were so controversial and electorally unpopular, four councils opted to de-amalgamate in 2013.
And according to Mr Rhoades, total council revenue in Queensland grew by 27.4 per cent following the 2008 mergers, whereas the rate growth over the same period was 13.4 per cent.
“As a result of nearly four decades of rate pegging, NSW actually has the lowest per capita rates of all jurisdictions except the Northern Territory,” Mr Rhoades said.
Mr Rhoades also compared NSW rates to Victoria following its mergers, where he pointed to the Commonwealth’s most recent Local Government National Report 2012-13, where Victorian council rates average $692 per capita compared to $499 in NSW.
That is a difference of nearly 40 per cent.
“This is despite amalgamations in 1994 that reduced the number of Victorian councils from 210 to 78,” Mr Rhoades said.
At the Inquiry, Mr Rhoades hammered the state government’s Fit for the Future reforms and criticised its claims that they were designed to drive down rates, improve infrastructure and provide better services as it “had failed to deliver any evidence to support its case”.
“The argument that bigger is always better lacks evidence, and is in fact contradicted by a larger body of research and real life experience that challenges that proposition,” Mr Rhoades said.
He said the Australian Centre of Excellence in Local Government (ACELG) criticised the perception that municipal consolidation will result in gains through efficiencies in scale, saying there was clearly ‘insufficient robust research’ to support the proposition.
“More recent research conducted by Lake Macquarie City Council General Manager Brian Bell demonstrated no discernible economies-of-scale efficiencies in bigger councils, and found amalgamated councils did not deliver better performance than non-amalgamated councils on any of the Fit for the Future performance indicators,” Mr Rhoades said.
According to Mr Rhoades, “many have argued” that the real efficiency gain from amalgamations is that the state government and property developers simply have fewer councils to deal with.
“Well that’s not a benefit to local communities, and it is not in itself sufficient justification for forced amalgamations,” Mr Rhoades said.
He said independent polling conducted by respected market research company Micromex had found more than 60 per cent of individuals in the Greater Sydney Basin wanted their councils to stand alone.
The same poll also found that less than one-in-five supported the government’s proposed amalgamation option for their Council.
“So not only is there a distinct lack of evidence to support the government’s claims, there is also hard evidence that forced amalgamations are strongly opposed by residents and ratepayers,” Mr Rhoades said.
