NSW premier Gladys Berejiklian just buckled to the Nationals over council mergers

Gladys Berejiklian. Photo: Don Arnold/ WireImage via Getty Images.

Forget anything the NSW government tells you about efficiency and cost savings when it comes to council mergers. Now it’s more about the politics and the Coalition’s re-election chances in two years.

This morning, following an extraordinary cabinet meeting called by premier Gladys Berejiklian to deal with Baird’s messy legacy on council amalgamations, the goverment essentially buckled to terror in the ranks of the Nationals about the 2019 election.

Mergers in the city will continue, but planned amalgamations in country NSW have been scrapped.

There were six regional mergers still on the drawing board, including Wollongong and Shellharbour, and Newcastle and Port Stephens councils.

Berejiklian appears prepared to wager that the Coalition can survive the backlash in the city, but not backing down in the bush has the potential to severely damage the government’s junior partner, the Nationals.

Last May, Baird sacked 378 councillors on 44 councils overnight, crunching them into 19 new entities under administration for 18 months. That meant voters in some parts of the state headed to the polls last September, while residents of the merged regions head to the ballot box later this year.

The bigger picture reduced 152 councils to 115, but legal action against 11 mergers involving 29 councils left those outcomes in limbo.

Five outstanding mergers in Sydney will go ahead unless court action initiated by the councils involved succeeds, but the proposals in regional NSW will be abandoned.

To give you some idea of the level of disparity in these decisions, Baird and the Bathurst-based former local government minister Paul Toole crunched together three Labor-dominated inner west councils, creating an LGA with a population of 186,000. It will have 15 councillors and revenue of around $300 million when administrator Richard Pearson returns control to elected representatives later this year.

Meanwhile, plans to merge Walcha with Armidale after an IPART health check said it meet scale and capacity requirements for long term viability, were scrapped after deputy prime minister and Nationals leader Barnaby Joyce lobbied against it. That’s no reflection on Walcha’s administration, but the difference in reform outcomes are stark. Walcha has a population just over 3000, a budget of around $16 million and eight councillors.

Announcing her decision today, the premier said there were strong justifications for pushing ahead in the city that were less apparent in the regions.

“Whilst there have been a number of significant improvements in merged regional councils, we accept that a one size fits all model does not always apply outside Sydney,” she said. “The financial benefits over the next 20 years will be six times greater in the Sydney councils than those in regional areas.”

Berejiklian was always going to struggle to unscramble the egg Baird left behind. She floated the idea of plebiscites in the contested regions, but that too was a nod to popularism over good policy.

Today she was at pains to point out that before the mergers, Sydney had 41 councils compared to 1 in Brisbane, although her point suggests they haven’t gone far enough. The political sensitivities were obvious last year when plans to merge Liberal-dominated Hills and Hawkesbury councils were abandoned, while the merger of North Sydney and Willoughby, and including Mosman in the new northern beaches council with Manly, are both before the court.

And the reforms in NSW are still a far cry from Jeff Kennett’s 1994 reforms in Victoria when he reduced 210 councils to 78.

The Orange by-election late last year shellshocked the Coalition when the Nationals lost the seat after 69 years to the Shooters, Fishers and Farmers Party. It cost Troy Grant his job as NSW Nationals leader.

Deputy premier John Barilaro, who took over from Grant, began pushing to block the mergers of several regional councils. Today the Nationals leader said scrapping those amalgamations was designed to “put an end to the confusion and uncertainty for those councils locked in drawn-out legal battles”.

But the simmering anger of voters remains a time bomb for the government and with two city by-elections coming up in Liberal seats – Baird’s Manly and North Shore, where former health minister Jillian Skinner departs after 23 years – the direction of momentum in Berejiklian’s leadership will be set by the outcomes.

Voters will also go to the polls in Gosford, won by Labor’s Kathy Smith by just 200 votes at the last election, following her resignation this week to deal with a cancer relapse. Gosford and Wyong councils were merged last year, again in the face of strong community opposition.

The new local government minister Gabrielle Upton said the mergers were focused on Sydney “to weed out the duplication, mismanagement and waste of Sydney’s councils, an issue far less prevalent in regional NSW”.

“The five remaining metropolitan mergers are expected to generate $530 million in benefits over 20 years. Communities deserve to see these benefits,” she said.

But now it appears under Berejiklian that communities in regional NSW don’t need those benefits as much.

* The opinions expressed in this article are those of the author.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.