Cost of de-amalgamation must be paid by NSW government

Opinion by PIP HINMAN

In response to a seeming concern by Labor councillors Darcy Byrne and Mark Drury that rates would rise in any demerger, the majority of councillors on September 14 tabled a letter from the Office of Local Government which again stated that the cost of any demerger of Marrickville, Leichhardt and Ashfield Councils would be the state government’s responsibility.

Under section 218CC of the amended Local Government Act (LGA), Clause 6 states that, under section 620, the minister must “ensure that the cost of any de-amalgamation of the new area resulting from a business case under this section is fully funded”.

Since the May 24 decision to have a poll of residents about the forced amalgamation, Labor councillors have been running a scare campaign about the costs of any de-amalgamation being borne by residents.

They have seized on the Morrison Low (ML) cost benefit report which projects possible rate rises to justify their campaign. This is despite the ML report not being able to provide sources for these projections.

Therefore, the Labor councillors’ scare campaign in rate rises is based on unsourced figures.

Real rate rises

However, in the last month, most of us were hit with the reality of rate rises – from a “rate harmonisation process” which is a direct result of the forced amalgamation under the NSW government’s now defunct “Fit For Future” council merger policy.

In some cases, unit owners have been slugged more than those owning houses. No one seems to be able to answer the question of what calculations were used in harmonising the rates across the three former councils.

Rate rises in the forced mergers of 20 councils were predicted in 2020. A report by LSI Consulting found it was due to losing $1.03 billion in three years. Some decisions about spending would not have helped, such as the Inner West Council’s decision to spend almost $10 million on an IT project without going to tender.

Councillor Byrne’s unsuccessful motion at the last council meeting, “Opposing Rate Increases to pay for de-amalgamation”, was designed to confuse by jumping over the next important step, which is the NSW Electoral Commission-conducted poll on de-amalgamation on December 4.

The poll is designed to gauge residents’ views on the question of de-amalgamating. If a majority decides they do want to demerge, the incoming council will have to prepare a business case to put to the Office of Local Government and the NSW Boundaries Commission.

It is the new council that will have the job of preparing the case, along with input from residents, if a majority votes that way.

Byrne has repeatedly stated publicly that the poll is “not a priority” for him.

Under his mayorship, residents have not been informed of the arguments for and against de-amalgamation.

It is now nearly October and confusion reigns as the council’s recent Feedback survey on the Morrison Low report and poll question reveals.

This online survey asked for feedback about the poll question, which had already been agreed by council and approved by the NSW electoral commission. Who decided then to ask this “question about the question”? Councillors certainly did not.

Reading the feedback, it appears that many residents who responded thought they were being asked if they supported de-amalgamation: about three quarters of respondents said “Yes”.

Feedback on the Morrison Low report also revealed that only specialists will read a 65-page report, which is in itself confusing because it claims to be impartial but, in fact, mainly puts the case to stay merged.

Will rates rise in de-amalgamated councils?

No-one, not even Morrison Low, can say definitively that rates will rise in a de-amalgamated council because estimates of the financial gains from the sharing of services have never been made. This is despite council asking the ML firm to investigate this aspect.

Residents urgently need councillors to sign off on the “Yes” and “No” cases for de-amalgamation. They need the brief argument — minus the spurious figures – in their letter boxes now so the discussion can take place around the kitchen table, free from spin and scare campaigns.

[Pip Hinman is the Socialist Alliance candidate for Damun ward in the Inner West Council. She favours a democratic poll to give residents the opportunity to have their say on the forced amalgamations of 2016.]