Council amalgamations back on the agenda in NSW

13/09/2014 2:36 pm

NSW Fit for the FutureFears among NSW Councils  are growing rapidly that a new $1 billion State government package deal tied to reforms is a Trojan horse for council amalgamations in the lead up to the March 2015 State election.

This week NSW Premier Mike Baird announced a number of incentives for of councils, including more rate-setting flexibility, alongside cheaper loan finance; greater planning powers; priority access to state funding to help any councils that want to merge but there is a catch: local governments must demonstrate they are  ‘Fit for the Future’ .

To prove they are fit, councils must complete a self-assessment by June 2015, the criteria of which some councils say includes the requirement to put forward an amalgamation proposal, if that’s what was recommended by the independent review that informed the funding package.

An analysis received last week by the Department of Local Government shows that last year two-thirds of NSW councils were operating in the red, running combined deficits exceeding $400 million.

Across all NSW councils the operating result was a net deficit of $280 million, the analysis by Treasury's financial services arm, TCorp, found.

Local government minister Paul Toole was asked last weekend if a different amalgamations policy could be taken to the 2015 election, Mr Toole urged all councils "to have a conversation with their communities about how they plan on building a sustainable future".

The Sansom panel's final report found it was "absolutely clear" NSW did not have the financial and human resources to support 152 councils. The report said Sydney councils should be "significantly reduced" from 41 to between 15 and 18. "Sooner or later, amalgamations will have to be part of the package," it said.