There are many questions unanswered about the future shape of councils, write Brian Dollery* and Joseph Drew.*
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As residents of NSW prepare to go to the polls for the state election (this) month, they should ask themselves some important questions.
Why has the Baird government rushed through its Fit for the Future reforms despite a good deal of “unfinished business” that its own expert panel and the Office of Local Government agree will significantly alter the financial sustainability of councils?
The government has committed to a comprehensive review of rating practices that may well result in significant changes to revenue.
It has also committed to a new role for the auditor-general in response to assessments by TCorp and the auditor-general that the data in council financial reports is not always reliable.
Further, the government has instructed the NSW Local Government Grants Commission to redirect funds to local communities with the greatest need.
All this raises obvious questions.
How can the government assess the financial sustainability of a council without knowing how much revenue it will derive through rates and changes to grant allocations?
How can the government assess council sustainability on financial data which its own agencies agree is unreliable?
Why is the government persisting in using a measure for council efficiency that does not measure efficiency?
No economist would support its contention that per capita expenditure accurately measures municipal efficiency.
Why is the government prevaricating on the controversial question of forced mergers after the March election?
Why are councils being given an incredibly short period of time to explore voluntary amalgamations?
How much debt will ratepayers be forced to accept from neighbouring councils in forced mergers?
If Oberon and Bathurst councils amalgamate, the residents of Oberon will inherit $22 million in outstanding loans and spend another $72 million to bring Bathurst’s assets up to standard.
Yet the government is offering only $5 million for non-metropolitan mergers.
This would leave Oberon residents almost $90 million out of pocket.
Existing differences in rates would create winners and losers.
Average residential rates in Bathurst are $396 higher than in Oberon. Average business rates in Bathurst are $3279 higher.
These are also important questions for the Minister for Local Government Paul Toole.
These councils are in his electorate.
*Professor Brian Dollery and Dr Joseph Drew are from the Centre for Local Government University of New England - Sydney Morning Herald
