A bunch of councils in Australia's biggest state are about to get annihilated

Photo by Cameron Spencer/Getty Images

A majority of local councils in New South Wales are facing annihilation as the Baird government pushes ahead with local government mergers.

Premier Mike Baird wants the mergers to be underway by the end of the year, saying it’s the “end of the road” after a four-year push by the Coalition government for amalgamations, although he would not be drawn on whether he will make them compulsory.

The state government has been pushing for mergers since 2011, releaseing a number of reports on the issue, and today’s Independent Pricing and Regulatory Tribunal (IPART) report gives the premier a new stick to beat councils with, arguing that mergers would save around $2 billion over 20 years.

The government laid down the criteria for the independent regulator to cast its eye over 144 local councils to assess whether they were “fit” for the future. The councils responded with their future plans, but more than half did not measure up in their capacity.

IPART chairman Dr Peter Boxall said just 52 of the 139 proposals, received from 144 councils, were found satisfy the criteria. They included four merger proposals, covering nine councils, and 48 stand alone proposals.

Even the City of Sydney was assessed as “not fit” as a global city. An earlier review has proposed it merge with Waverley, Randwick, Botany Bay and Woollhara. Under that plan, greater Sydney’s 29 councils would be merged into just 9 regional councils. Surprisingly, many smaller regional and remote councils were given the all clear and eight Far West NSW councils were not included in the IPART review because of their unique circumstances.

The IPART report painted a bleak picture for the rest, saying 71% of councils in metropolitan Sydney are “not fit”, primarily because councils did not propose a merger; and 56% of regional councils are “not fit”, due to not proposing a merger despite clear benefits, ongoing deficits or both.

“All proposals to either stand-alone or merge were assessed according to whether they delivered the scale and capacity, financial sustainability, the ability to effectively manage infrastructure and services, and efficiency for the community as required under the criteria,” Dr Boxall said.

“Of the 87 proposals found to be unfit, 60 (43%) did not have sufficient scale and capacity, 18 did not meet the financial criteria and nine did not meet either of these criteria.”

Baird announced a carrot for councils to merge – $10 million to cover the merger costs and a new fund offering up to $15 million for community infrastructure.

Baird said it was the last chance for councils to “do the right thing for the future of their communities”.

“With 60% of councils not fit for the future, this IPART report shows the situation is now critical and that action is needed to ensure ratepayers get value for money and the services and infrastructure they deserve,” the Premier said.

The government has given the councils just 30 days to respond with their positions on mergers and the IPART findings.

The IPART report is online here.

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