NSW councils are running scared and agreeing to merge amid real fears that they will be sacked or forced to merge with their unpopular neighbours.

Yesterday (Tuesday), three inner-west Sydney councils agreed to submit a merger proposal: Ashfield, Leichhardt and Marrickville, although all three said they remained “committed to their strong preference to stand alone.”

The councils issued a joint statement that said: “In submitting a merger preference the councils seek to avert the threats of possible dismissal, appointment of an administrator in place of democratically elected representatives, and/or forced amalgamations with other councils.

“The three councils have received expert legal advice that indicates the state government has the authority to initiate amalgamations without consent of councils, and suspend councils and appoint an administrator during that process.

“Any such actions though could be subject to legal challenge. The councils will be ensuring the government’s process complies with all legal requirements.”

NSW Local Government Minister Paul Toole has already indicated he will accept this merger and the councils will not be placed under administration.

The merger the trio want to avoid is that recommended by the Independent Local Government Review Panel (ILGRP) in its 2013 report ‘Revitalising Local Government”, which suggested the creation of an Inner West super council involving six councils, which would also throw Burwood, Canada Bay and Strathfield Councils into the mix.

NSW Premier Mike Baird has made no secret of the fact he wants to drastically reduce the state’s 152 local councils and he has given those who have not already submitted merger proposals until November 18 to do so.

Of the 139 proposals received by Independent Pricing and Regulatory Tribunal (IPART), which handed down its findings last month, 87 councils were labelled as not being Fit for the Future, with 60 of these failing to meet the government’s target of ‘scale and capacity’.

Dr Bligh Grant, Senior Lecturer at UTS’ Australian Centre for Excellence in Local Government (ACELG), said that sacking councils was not a particularly unusual course of action to take in Australia.

Dr Grant – who freely admits he is a political scientist, not a lawyer – said the NSW government had the power to sack councils and appoint administrators and that any legal challenge by councils was unlikely to succeed.

There have been many instances of forced council amalgamations over the years, for example, the Beattie/Bligh Labor governments’ forced mergers of Queensland councils in 2007-8, which condensed 156 councils into 72 and 32 Aboriginal and Island councils to 14.

In 1993 Victorian Premier Jeff Kennett reduced the state’s 210 councils to 78 and councils remained under administration until local government elections two years later. In July 2008 the Northern Territory government merged 53 Community Councils into eight Regional Shires.

“Sacking individual councils is a relatively common event across the local government systems in Australia,” Dr Grant – an agnostic on council mergers – said.

He said if councils did take the state government to court it had the potential to “roil the courts for a while.”
“Placing to one side the legal intricacies we ought to realise two cardinal points: First, the NSW government is a sovereign government in its own right of which local governments are its creation,” he said.

“As such, while any legal challenge would no doubt bring out the intricacies of state-local government relations as they exist in law and potentially could be very expensive, the end-game will be that the NSW Government will prevail.”

In addition, local government in Australia – unlike other countries – does not rest on a longstanding tradition of community ‘self-rule.’

“In fact, in NSW the colonial and state government struggled to get local communities to provide any services for themselves for a very long time. So we don’t have this tradition in our jurisprudence and it can’t be invoked in any legal challenges to the reform process, like for example, it is in the US under the principle of ‘home rule’ in many states.”

Indeed, the ILGRP report recommended limiting the state government’s “currently unfettered right to impose amalgamations and major boundary changes more or less at will.”

The report also suggested any amalgamations or major boundary change should be preceded by careful analysis and full community consultation handled by an expert, independent body and that “the Government should not be able to overrule the findings and recommendation of that body without good cause.”

But the Greens claim they have legal advice which says Premier Mike Baird cannot sack or suspend councils to force amalgamations.

Greens MP David Shoebridge maintains that councils could pursue injunctions and orders through the courts.

“Legal advice obtained by the Greens makes it clear that neither the Premier, nor the Minister for Local Government, have secret powers to sack or suspend councils to force amalgamations,” Mr Shoebridge said.

“The independent barrister’s advice confirms that the Local Government Act seriously constrains the ability of the government to undertake a political sacking or suspension of councils to appoint tame administrators that agree to amalgamations.”

Mr Shoebridge said those councils who jumped ship and “give into the Premier’s bullying” will make the government’s job easier because the amalgamation proposal would then not have to be reviewed by the Boundaries Commission.

Now all eyes are on what Mr Baird will do to those councils who continue to defy him and opt to stand alone.

The Premier has already pledged to deny up to $25 million of funding per new council through merger incentives, as well as blocking access to cheap loans through TCorp, to those councils that do not meet next week’s deadline for merger proposals.

Sacking councils would avoid an unwinnable stoush in the Upper House but merger proposals for those that did not consent would still have to involve a reconvened Boundaries Commission and precipitate a potentially damaging and drawn out public consultation.

Political Backlash

Dr Grant said the government could end up paying a high price for its boldness, with Liberals and Nationals liable to suffer at the next state election in 2019.

“The political backlash will be felt at the state level: If councils amalgamate – even if they don’t – I think it’s reasonable to expect some political backlash against both the Liberals AND the Nationals in the next State election,” Dr Grant said.

“Certainly there are political risks for the state government in this process. For example, following the forced amalgamations of local government in Queensland in 2008 the swing against the incumbent Bligh Labor Government in the state election in 2012 was 15.7 per cent – the largest swing in Australia’s political history.

“One way of reading it is that the Baird Government is exercising some political courage.”

He said there were rumours that the Nationals were “spitting at the seams” because of it.
It doesn’t mean voters will necessarily swing towards Labor.

“The electoral ramifications of this process at the state level aren’t predictable. You might get an increase in independent candidates running for the state seats, for example.”

“It’s also worth noting the flow-on effect of less people involved in local government for Australia’s three-tiered democracy. Fewer people are exposed to the day-to-day workings of the democratic system as it actually operates and that’s a bad thing.”

Local councils are an important training ground for those who wanted to become state or federal politicians.
Nevertheless, he cautioned against making the assumption that most of the NSW population cared deeply about council mergers.

“One of the things we’ve found through our ongoing “Why Local Government Matters” research project at ACELG is that while amalgamation is hotly contested and it’s very visible this doesn’t necessarily mean that that heat is felt equally across the community.”

“The local government sector is very visible and it fuels its own fire. In a sense this is perfectly understandable: people closest to local government – those with jobs and political positions – have more to lose.
“Not everyone cares truly, madly, deeply about local government, believe it or not.”

He said that a range of research, including ACELG’s ‘Why Local Government Matters’ work and the recent Constitutional Values Survey undertaken by Griffith University, had suggested that people identified with their local area but not necessarily with their local council.

The 2013 ILGRP report appears to agree with this research.

“Experience in other states confirms the finding that for most people local government reform is not a ‘make or break’ issue, and that after a relatively brief settling in period new arrangements are widely accepted,” said the report.
Of course, one of the biggest tragedies for NSW councils is their other, very real, concerns have been swamped by discussions on amalgamation.

Issues such as rate capping, fixing the infrastructure backlog, grant distribution, reducing compliance burdens, establishing joint organisations, training for councillors, cost-shifting between levels of government have all been completely subsumed in the fires of the forced merger debate.