The panel has justified its plan by concerns about the long-term financial sustainability of small councils, and the ability of larger councils to better plan the future direction of Sydney's communities.
The plans will struggle to go anywhere as long as the O’Farrell Government keeps to its promise to undertake no forced council amalgamations, and will face resistance from councils and from communities who want to keep their councils local.
The report includes a recommendation for a large number of mergers across the Sydney region. Most local councils in Greater Sydney have not changed boundaries since the last big round of mergers in 1947-8.
Local government area populations vary from less than 15,000 people in Hunter’s Hill to figures topping 300,000 in Blacktown and 200,000 in Sutherland Shire. Generally councils in the eastern half of the Sydney metropolitan region are much smaller, and there are more of them.
If you divide Greater Sydney in half, there are 12 councils in the western half, and 26 councils in the eastern half. Both halves have a population of about two million people. The average number of residents per council is twice as high in the western half as in the east.
The report recommends creating a massive new City of Sydney covering all of the eastern suburbs and stretching west to Marrickville and Leichhardt, along with enlarged councils around Parramatta, Liverpool, the Inner West, the St George region, the Northern Beaches and the Lower North Shore.
In addition, the report recommends councils are merged around major rural centres, the creation of "County Councils" sitting above existing local councils in rural areas, and new "local boards" in areas where a local community no longer has its own council.
Most of the changes to council structures rely on arguments around financial "sustainability". The report has identified a large number of rural councils that are financially "at risk", but only a small number in Sydney.
While many councils are operating deficits, the report doesn’t explain how amalgamations will fix those problems without reducing costs or increasing revenues. Local government has faced increasing demands on its resources while state governments have made it harder and harder for councils to find the money to pay for these demands. There is no evidence that council amalgamations (as opposed to cooperative strategies that involve sharing resources) lead to substantial savings.
Commendably the panel also recommends allowing councils to increase rates above levels currently allowed, which could improve the financial situation of many of these councils, and would make amalgamations unnecessary. Yet it still proceeds to recommend mergers for councils in stronger financial health.
Many political insiders and lobbyists support a reduction in councils and councillors as a way to simplify the political system and make it easier to get decisions made. They want to see local councils operating more like the NRMA: as apolitical bodies where management makes the day-to-day decisions while elected representatives function as a board of directors. The report continues a push to make councils more about qualified professionals making decisions, rather than ordinary community members elected by the voters.
Yet many residents actually have more contact with local government than with state or federal government and, despite imperfections, appreciate having councillors and local services close to home. In the past, governments have failed to pass amalgamations in the face of strong opposition from the local community. In March this year, voters in four former council areas in Queensland voted to break away from the "super-councils" created by the Beattie Labor government.
Much larger councils could have more ability to provide an alternative to the state government and provide better services, but this would require more than amalgamations; it would require a change in the financial and political balance between state and local governments. It seems inconceivable that the O'Farrell Government, or any other state government, would allow that.
If the NSW Government wants to genuinely improve local government, they should look beyond creating super-councils. The real crisis in representation is not in the small councils of eastern Sydney, but the big councils of Western Sydney. Councils like Blacktown, Parramatta, Campbelltown, as well as Sutherland, Hornsby and Sydney, have a ridiculously small number of councillors representing such a large area. Large suburban councils in the United Kingdom often have up to 40 elected councillors. Larger urban councils should consist of at least 25 councillors to represent all of their community.
Councillors currently get paid a small stipend to cover the costs of attending council meetings, and nothing more. If you wish to see councillors providing a higher quality of service, they need to be paid a wage and should be expected to treat their council work as an actual job, at least for part of the week, if not full-time.
Many local councillors treat their duties as extracurricular activities, and many local community figures can’t run for council because they can’t afford to take the time off from work to do the job well. This means that many councils are dominated by retired people, and those who own small businesses or have jobs which benefit from them sitting on council (such as real estate agents and political staffers).
The quality of council representation and respect for local government is no greater in big councils like Blacktown and Sutherland than in small inner-city councils, and is often lower. If you don’t fix these structural issues, council amalgamations will likely lead to a cut in services while doing nothing to strengthen local government.
Despite the grand scale of the Local Government Review Panel’s report, it’s unlikely that much of it will be implemented. Some communities may support amalgamation, but it’s very unlikely that elected councillors will come on board. Even limited council amalgamations will see many local councillors lose their seats. The kind of radical changes proposed in the Eastern Suburbs would see most current councillors kicked out of office. It’s unlikely that the NSW Government’s incentives will overcome this.
If the Government really wants to create "super-councils" in the Sydney region, it will need to come in over the top, forcing amalgamations on councils that are strongly opposed.
These amalgamations will be unpopular, both with voters and with many of the Liberal councillors swept in on the conservative tide last September. Will Liberal MPs in the eastern suburbs and on the north shore continue to support reform plans if they face a backlash from their residents and their allies on local councils in their electorates?
Since their election in March 2011, the O’Farrell Government has continued the work of previous governments in taking responsibility for major developments out of the hands of councils and ensuring that local councils are kept out of the way of important decisions. Now that they have achieved this, why would they expend political capital to implement unpopular amalgamations?
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