Is Your Council Fit Or Not Fit: A Game You Can Play Along With At Home

There’s a hot political show running right now in NSW. It’s a game which local councils and their residents are being forced to play by the Coalition Government.

It’s called “Fit or not Fit?” If you win, your local council survives, if you lose your local council is amalgamated into a 250,000 plus resident mega-council.

What are the rules you ask?

The first rule is every local council needs to prove they have sufficient “scale and capacity”. Fail this one and you are amalgamated in the first round.

So, here’s a simple starting question. What is “scale and capacity?” I thought I would ask this question of the experts the government has put in charge of the process.

First let’s see what the Chief Executive Officer of the NSW Office of Local Government has to say when pressed during Monday’s hearing of the Upper House Inquiry into the Baird Government’s Fit for the Future plans.

Mr DAVID SHOEBRIDGE: What is the difference between scale and capacity?

Ms DOHENY (CEO of the Office of Local Government): Mr Orr worked on the development of the IPART’s methodology and he was working closely on the terms of reference. I will ask him to answer the question.

SHOEBRIDGE: Provided he answers the question. What is the difference between scale and capacity, Mr Orr?

Mr ORR (Number 2 at the Office of Local Government to Ms Doheny): Mr Shoebridge, in terms of scale and capacity, the two concepts are linked together. I can point you to the panel report and I can read back to you what some of their findings actually were.

SHOEBRIDGE: It would be better if you answer the question.

ORR: I am answering the question. I can go through all of that and explain that to you and I can read it back to you, if that is what you want me to do.

SHOEBRIDGE: Just answer the question.

ORR: The point is that scale and capacity are two terms that are linked. Scale is about the size of an operation. Capacity is about the ability of the operation in respect of the way in which they do things. The two terms are obviously linked. The panel clearly showed a link between the two terms. I can read to you some of the observations which were made by the panel in relation to those terms, if that is helpful.

No Mr Orr, it wasn’t very helpful. But not to worry because we also had the IPART – the Independent Pricing and Regulatory Tribunal – Chair at the hearing.

IPART has been given the job of judging councils either ‘Fit or not Fit’ by the NSW Coalition Government. The Government set the rules but it’s IPART who is spinning the wheel and announcing if your local council comes up to scratch. 

So what did IPART have to say about scale and capacity?

SHOEBRIDGE: Stakeholders also, according to your report, raised concerns that it was not clear whether or not scale and capacity were distinct considerations and not interchangeable. Are they distinct considerations – scale and capacity?

Dr BOXALL (Chairman of IPART): We have to make an assessment about whether a council’s proposal satisfies scale and capacity – and it is whether it satisfies all the criteria, which I think is about 11 criteria, which emerged from the panel’s report.

SHOEBRIDGE: This is a simple question. Are they one and the same thing? Are they interchangeable?

BOXALL: They are the same thing – scale and capacity. It is one thing. It is not like you can have scale and not have capacity.

So, just stopping there – Dr Boxall from IPART says scale and capacity “is one thing” while Mr Orr from Local Government says “scale is about … size” and “capacity is about … ability”.

But wait, there’s more:

SHOEBRIDGE: How does scale and capacity add anything?

Dr BOXALL: Scale and capacity emerges from the panel’s deliberation, and we have been asked to assess that as a criterion.…

SHOEBRIDGE: When you are assessing whether or not a council has effective regional cooperation as part of scale and capacity, is it just gut instinct? Is it just a call based on your gut reaction? There are no criteria that you are assessing it against.

Dr BOXALL: No, the criteria are subjective and we make a judgement. Councils have taken this seriously. Most councils have addressed this in their proposals, and we take that on board in coming to a decision about whether the council’s proposal satisfies or does not satisfy the scale and capacity criterion.

SHOEBRIDGE: Ms Garnier, you are the secretary and you are making a recommendation report up to the panel. When you are looking at scope to undertake new functions, what new functions are you taking into account in that?

Dr BOXALL: The point is that the councils—

SHOEBRIDGE: It is a simple question: What new functions are taken into account?

Dr BOXALL: It depends. Many councils have put up in their proposal, which is on our website, the sorts of things that they think we should take into consideration in assessing scale and capacity.

SHOEBRIDGE: So you just make it up on a case-by-case basis?

Dr BOXALL: No, we do not make anything up; we assess the proposals which the councils have put up.

IPART like to say they are independent of government. They have “Independent” in their title for goodness sake.

IPART doesn’t like being reminded they are part of the executive and are bound to do whatever task the government gives them, and are stuck with the government’s terms of reference, however rotten.

So, are they part of the executive? Here’s the good Dr Boxall again:

SHOEBRIDGE: There are three branches of government: the legislature, the executive and the judiciary. Which one is IPART in?

Dr BOXALL: We are an independent organisation established by Parliament.

SHOEBRIDGE: Dr Boxall, if you could answer my question, there are three branches of government – legislative, executive and judicial – which one do you fit into? I am happy for you to take the question on notice.

Dr BOXALL: I will take it on notice.

Mr HARMSTORF (CEO of IPART): I would like to address that. As I mentioned before, there are a number of avenues by which decisions get referred to IPART. In some cases we have determinative powers, such as setting the prices for water utilities, in other cases we make recommendations to ministers for them to take to government. In this particular case it is a step short of that even. We have been asked to make assessments of whether councils are fit or not fit. Those assessments will go to the Minister and the Premier, and beyond that we do not have a role at this stage.

SHOEBRIDGE: You must know that you are part of the executive. You are not part of the legislature; you are not part of the judiciary; you are part of the executive. You have some statutory protections but you are part of the executive.

Mr HARMSTORF: Yes.

I hope that clears things up for everyone. So what have we learned?

1. Scale and capacity are the same thing, and they are different, and they are linked depending on who you ask;

2. Scale and capacity (in all its glory) is not based on gut instinct, as IPART says it’s “subjective and we make a judgment”;

3.  “Gut instinct” and “subjective judgment” mean different things to IPART; and

4. IPART is probably part of the executive, or perhaps Dr Boxall will tell us on notice that it’s part of a mysterious fourth arm of government.

Meanwhile the “Fit or not Fit” game rolls on and your local council and community are, as always, in the safe hands of the NSW Coalition Government.