The money or the gun? NSW council merger battle


Scores of NSW councils have until November 18 to submit merger proposals to the state government, or risk losing millions of dollars and access to cheap loans.

The clock began ticking for the 87 NSW councils that failed the Fit for the Future test when Premier Mike Baird publicly released the Independent Pricing and Regulatory Tribunal (IPART) report last Tuesday and gave councils 30 days to submit their plans to merge or face the consequences.

The government has stressed that this is the endgame for councils, calling it ‘the final consultation process’ and promising there will be no extensions to this deadline.

IPART received 139 proposals from 144 NSW councils – which included only four merger proposals – but rejected 87 of them as being ‘not fit’, mostly because the Tribunal said they failed the scale and capacity test.

For councils that don’t agree to merge ‘voluntarily’ by the deadline, it is likely they will lose control over the entire process and be forcibly merged by the government.

Recalcitrant councils will be barred from accessing the $10 million per council to fund mergers ($5 million if they are regional councils). They will also miss out on between $5 million and $15 million per council (with more money for Sydney councils and mergers with more partners) under the new Stronger Communities Fund, which is for community infrastructure, and refused access to cheaper TCorp loans. Read more about the benefits here.

As an extra incentive for councils to amalgamate with more than one other council, the government has offered to throw an extra $5 million from the Stronger Communities Fund if a new council arises from the merger of three or more councils.

During a webinar with NSW mayors last week Local Government Minister Paul Toole said: “The money is available for the next 30 days and this is your final change to be able to receive that money.”

The government repeatedly sidestepped questions on whether they would force mergers between those councils opposed to them and neither would Mr Toole answer whether money would be available to those councils who put forward merger proposals with unwilling neighbours.

Understandably, many councils are already getting jumpy and deciding it might be better to fold, rather than hold out and risk forfeiting the merger money and potentially being put into administration by the State government.

Government News understands that Willoughby and North Sydney Councils are open to merger talks with Mosman Council but the latter is unwilling.

The Independent Local Government Report suggested the formation of a Lower North Shore super council comprised of Mosman, North Sydney, Lane Cove, Willoughby, Hunters Hill and Ryde Councils.

Leichhardt Council, in Sydney’s inner west, has a community meeting this evening to discuss its plans.

Regional NSW councils are also feeling the heat.

Deniliquin Mayor Ashley Hall said he feared the consequences of continuing to oppose a merger with Murray and Conargo Shires, including losing out on the government money for voluntary mergers.

“If we don’t [come up with a solution], the government’s position is ‘we’ll do it for you’, which is clearly telling us there will probably be a forced amalgamation that may not be on terms we think are best for our communities,” Mr Hall said.

“We have to set the agenda. If we make recommendations to the minister on these and other important issues we can have a say in the control of our destiny,” he said.

“If we don’t there appears a strong likelihood our three councils will all be dismissed, an administrator appointed and the government will make the decisions for us.

“That is not Deniliquin Council’s preferred option.”

Interestingly the process appears to have been kicked up to the Department of Premier and Cabinet, away from the Office of Local Government, with rumours circulating that Mr Toole’s performance has been less than stellar.

The government has said that up to $2 billion ‘community windfall’ will come to councils over the next 20 years in Sydney Metro alone if mergers happen via additional infrastructure, downward pressure on rates and improved or additional services.

Mr Baird has promised that all councils will know where they stand by the end of this year. He has also said it is his intention local government elections proceed as arranged in September next year.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at  

Sign up to the Government News newsletter

Leave a comment:

Your email address will not be published. All fields are required