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People power pushes council mergers to the brink

“The byelection was the last chance we had to make our voices heard”: Marj Bollinger. Photo: James Brickwood An anti-merger protest outside Bathurst MP Paul Toole’s office last year. Photo: Supplied
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It was a policy dictated from the heart of commercial Sydney; from government office blocks in Macquarie Street and Martin Place, and from consultants’ suites in Barangaroo. But if the state’s council amalgamations plans are defeated in the coming days, or at least pared back, it will owe to political power exercised from RSL clubs, town halls, and showgrounds on the other side of the Great Dividing Range. Decision-making tends to flow from east to west in this state: here the west may have reversed the tide.

“We are laid-back people,” says farmer Marjorie Armstrong, 73, who has led the grassroots revolt against mergers in Oberon. “But you try and take local government from small communities and, yes, we will revolt.”

When Mike Baird stood for election in March 2015, he had not articulated a policy on council mergers. Yet in some ways states are always looking at changing the rules around local government. Councils receive no mention in ‘s constitution. They exist only as creatures of state law, created because states needed to ensure local facilities such as roads and street lights, but would not pay for them directly. In the bush, particularly, they remain important sources of decent jobs.

For the past century, however, the trend has been to shrink their number: since 1906 the number of councils in the state dropped from 327 to 152. This is why so many state politicians are so often asked to rule out undermining their independence, mostly in local newspapers who also depend on councils for both advertising and stories. “A Liberals and Nationals government will also ensure there are no forced council amalgamations,” the Nationals candidate for Bathurst, Paul Toole, told his local newspaper prior to the 2011 election.

Under Baird’s predecessor Barry O’Farrell, the government started looking at local government reform in 2012. An initial report, prepared by a panel headed by Professor Graham Sansom, recommended multiple functional changes, including allowing councils to charge higher rates for apartment owners. It also recommended fewer local governments. “NSW simply cannot sustain 152 councils,” the panel’s final report in late 2013 said. “There are shortages of highly-skilled personnel. The shortage of engineers, for example, is a significant factor limiting the capacity of councils to deal with infrastructure backlogs.”

By the 2015 election, Baird had not signalled what he would do on the issue. But he also refused to rule out forced mergers. Soon after the election, councils were asked to submit proposals as to why they should continue to stand alone, or to consider aligning themselves with neighbours for voluntary mergers. The result was a frenzy of deal-making and, in places, the nascent signs of a resistance. In the eastern suburbs, for instance, Waverley and Randwick councils agreed to a merger, while Woollahra resolved to stand alone. In the inner west, Labor and Liberal councillors agreed to a merger between Ashfield, Leichhardt, and Marrickville, though the area’s Greens and independents said the councils should stand and fight.

Country men and women also started organising. “There were people from Oberon writing to politicians,” says Armstrong “Country people don’t do that. I was stunned we could even get people to rally.”

In October 2015, over 600 people packed the local RSL in Oberon for a community vote on the issue.

Oberon Shire, home to around 5000 people largely employed in farming and forestry, was facing the prospect of being merged with the much larger Bathurst Council. The RSL vote was emphatic: 94.3 per cent were against the merger. A few months later, it was standing room only as locals crowded into a second meeting at the Oberon showgrounds. The public meeting was open to comment, and 83 people registered to speak – all but one of them in opposition to the merger.

In Cabonne Shire, less than two hours’ drive away, a similar movement was afoot. In May 2015, community group Amalgamation No Thank You (ANTY) formed after 400 locals turned up to a meeting in Molong to protest the proposed merger with Orange and Blayney councils. In New England, which was expected to host a tough battle in the July 2016 election, federal Nationals leader and canny retail politician Barnaby Joyce started to campaign against any forced merger of the small Walcha council.

The result was that the eventual announcement of forced mergers in May 2016 was both a bombshell, yet only a partial job. Baird and Toole, the local government minister, announced the creation of 19 new bodies formed from the immediate sacking of 42 councils. But they didn’t touch Walcha because of Joyce’s intervention. And they didn’t create a further nine councils, to be formed from the sacking of 25 existing bodies, because some of those councils had signalled their intent to challenge their mergers through the courts.

But the announcement did not quell the opposition. In fact, the manner in which it was made only intensified the disquiet. Mayors and councillors were given little or no forewarning of their dismissal. Bob Stewart, Mayor of Bombala in the state’s Monaro region, was driving into town from his farm when he learned by ABC radio he and his colleagues had been sacked.

“We could never get a meeting,” says Marj Bollinger, a Molong-local and ANTY spokeswoman of her attempts to talk to the government. “They were invited to every rally, every meeting, everything we had. They were never available.”

Toole, who had once promised Oberon locals he would oppose mergers and was now in charge of implementing them, was not explaining himself to the community, Oberon mayor Kathy Sajowitz says.

“There is a general feeling in the community Mr Toole has let Oberon down,” she says. “The community has lost faith in their local member.”

Adding to the government’s troubles, it found it increasingly hard to sell the potential benefits of mergers in local media that had always had a close relationships with its councils and councillors. On the radio, Alan Jones was decrying Baird’s despotism. Those who had been agnostic or supportive of mergers found that the issue had been swept up in fast-surging anti-government sentiment. The narrative had been established: mergers were on the nose.

The opportunity to fight back emerged in November when a by-election was held in Orange to replace Andrew Gee, a National who had left for federal parliament. By this stage, regional community groups had become something of a network of anti-amalgamation activists. They crossed shire districts for rallies and protests, placarded Cabonne, and on election day, manned polling booths in Orange.

“The byelection was the last chance we had to make our voices heard,” says Bollinger.

The result, also influenced by Baird’s greyhound racing ban, was a crushing loss for the Nationals in a seat it had held by almost 22 per cent. The Shooters, Fishers and Farmers Party won its first ever lower-house position. An emboldened Robert Borsak, one of its two upper house MLCs, told Fairfax Media at the time preparations were under way for a lower house campaign for the 2019 election. The party, which has been consistent in its opposition to forced mergers, intends to take on the Nationals in eight to 10 seats.

For the Nationals, the loss precipitated a spill. The Member for Monaro, John Barilaro, claimed the leadership and the deputy premiership from Troy Grant, and started on trying to repair the party’s relationship with its bush base. In December, he met with the Oberon anti-amalgamation group that had previously failed to gain a meeting with Toole. Spokeswoman Marj Armstrong articulated to Barilaro a sentiment bubbling across the state’s pending council districts. “We won’t give in, and we won’t give up. And we will put the Liberals and Nationals last every time we vote,” says Armstrong of her message.

In the heights of government, the change in political sentiment has been rapid. When Baird stood down last month, Barilaro immediately insisted there would be no more forced amalgamations in country areas. And the day before the incoming premier, Gladys Berejiklian, was unanimously elected Liberal party leader, some of her closest confidantes and advisers met to discuss controversial policy areas that were ripe for dumping or overhaul. Council amalgamations was first on the list. Keith Rhoades, the president of industry group Local Government NSW, said he had hour-long meetings with both Barilaro and new Local Government Minister Gabrielle Upton on Wednesday. “I found them to be very receptive,” says Rhoades.

Even now, a third of the proposed new councils are still pending the resolution of legal disputes. While that drags on, 29 councils are in limbo. Many councillors and mayors who were elected on four-year terms and were due to face an election in September last year are now serving overtime. Late last year, the NSW electoral commission added another layer of complexity to the unfolding democratic debacle when it said it may not be able to hold elections until 2020 for councils whose disputes extend beyond August. Such a delay would expose the government to wrath of voters at the 2019 state election.

Yet the unravelling of the amalgamations policy may be as messy as the policy’s development. There is as yet no clear indication of what the government will do, though Fairfax Media has reported there is likely to be a halt for further forced amalgamations and mini-plebiscites to allow for communities to decide the future of their councils. It remains unclear what will happen to councils that have already been merged – though one suggestion is that they too could face plebiscites about the prospects of de-merging, potentially as late as 2020. Berejiklian said this week a decision was “imminent” and councils that have fought the proposal are sniffing victory.

“This is a win for democracy,” says Woollahra Mayor Toni Zeltzer. “Clearly the state government has listened and they have got the message loud and clear that local communities want to have a say on the future of their local areas.”

However Upton need look no further than her Vaucluse electorate for an indication of the complexities to come. Although Woollahra is firmly opposed to a merger (a position endorsed by Upton as recently as 2015), Waverley and Randwick remain keen. “To a certain extent Waverley has already had a plebiscite,” Waverley’s Mayor Sally Betts says. Surveys of residents and ratepayers showed strong support for the amalgamation in that area. “We’ve identified fantastic savings for all our residents, including Woollahra residents. It would be a pity. Our residents would lose out on some pretty good savings and funding to fix up all sorts of infrastructure.”

But the benefits were evaluated based on the three-council scenario, and should the government put a new proposition on the table – such as a merger just with Randwick Council – all bets are off. “We would need to go back and do a completely different assessment,” Cr Betts says, adding “If the government changes its policy we would prefer to stand by ourselves.”

And if Woollahra Council, which has already spent $850,000 on legal appeals, is allowed to remain independent while other mergers stand, that is sure to stoke questions of political equity. It would mean, for instance, there would be one council for Woollahra’s 60,000 residents (in the city’s most exclusive suburbs), and one council for Canterbury-Bankstown’s 360,000 residents. Hunters Hill, with its 15,000 residents, continues to fight to stand alone.

“It just stinks, it’s got politics written all over it,” says the former mayor of Parramatta, Paul Garrard, who says he will be campaigning for Cumberland Council to be de-merged.

“It’s like there’s two laws in this place. The inner city and west are being treated differently and now there’s a fear we are going to be treated from our country cousins as well,” says Garrard.

Unscrambling mergers that have proceeded would be its own nightmare. The government has already paid out hundreds of millions of dollars in incentive payments to merged councils, on top of the millions it spent on consultants such as KPMG to prepare reports into the mergers.

One issue is that if there were plebiscites would those plebiscites provide the opportunity for residents in the old council areas to vote? Or would the votes of the new combined council areas be tallied together? The results could point to very different outcomes.

There are myriad of other practical considerations. Administrator of the new Inner West Council, Richard Pearson, says reverting to three councils – Marrickville, Leichhardt and Ashfield – would involve unpicking the “very well advanced” integration process, and imbue the council’s functions with uncertainty.

“The prospect of a plebiscite means you would have to also be more conservative in your decision-making,” says Pearson, scheduled to be replaced by elected councillors in September. “You don’t want to be spending public money and then in six months time have to reverse your decisions.”

Long-term savings which underpinned the rationale of the merger process, and made largely from the retrenchment of staff, would immediately be jettisoned. Redundancy packages paid out to former general managers, and other senior management across the three councils would be sunk costs.

“You’d have to re-recruit a whole management layer,” he says. “You are reinstituting a cost that the merger was designed to save.”

Restoring the three councils management structures is expected to cost $4.5 million annually. While the councils await a clear decision from the Berejiklian government, the uncertainty is destabilising for council staff. “There’s a lot of people here who are saying ‘What’s going on?’,” Pearson said.

Greg Wright, the administrator of Bayside Council formed in September from the former Botany and Rockdale councils, said it would be increasingly difficult to pick apart functions that had started to come together. “We are starting to integrate systems and people and locations,” Wright said.

Another factor is that while a backdown on mergers might deliver some political reward, Berejiklian may also face a backlash within her own party.

Fairfax Media has been told many Liberal councillors who agreed to back mergers in their own areas to support the government are furious at the prospect of a plebiscite option. “After doing the right thing by the party and local government state wide, to let these recalcitrant councils off the hook is a betrayal of good councillors across the state,” said a senior Liberal local government source.

And then there is the business community, and the original arguments in favour of amalgamations. “Whatever they do will have consequences,” says Patricia Forsythe from the Sydney Business Chamber.

“The future of Sydney requires strong local government, it requires them to have adequate resources and infrastructure to manage the growth and none of that has changed,” says Forsythe, who would prefer Sydney’s councils reduced to only six.

More by-elections may nevertheless drive the changes. After the retirement of Baird and health minister Jillian Skinner, Berejiklian faces polls in the seats of Manly and North Shore – both areas where the mergers issue has been a flashpoint of community anger. Both seats have been historically vulnerable to strong independent candidates.

On the North Shore, Mosman mayor Peter Abelson says the anti-merge voice will be heard “loud and clear” at the ballot box. “There’s no doubt that if there were a by-election without this being sorted out there would be a very strong protest vote against the Liberals.”

According to sources, the Premier wants a resolution on the issue before Parliament returns on Tuesday, February 14.

Fixing the merger mess may be a daunting and costly task with its own political risks. But the prospect of a repeat of the Orange result in these two Liberal heartland seats could just be enough to convince Berejiklian it is worth it.

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