NSW state election 2015: Reducing NSW's 152 councils to 38 would cost $445 million, modelling shows

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 9 years ago

NSW state election 2015: Reducing NSW's 152 councils to 38 would cost $445 million, modelling shows

By Leesha McKenny
Updated

Drastically reducing the number of NSW councils would carry an upfront cost of $445 million, the NSW parliamentary budget office has estimated.

However, the cost of cutting back the state's 152 councils to just 38 would be "significantly higher" if the mergers were forced, the briefing note said.

Labor's local government spokeswoman Sophie Cotsis says the Coalition's plan is a ''complete sham''.

Labor's local government spokeswoman Sophie Cotsis says the Coalition's plan is a ''complete sham''. Credit: Dean Osland

"It is assumed the council mergers would be voluntary, not forced, therefore any costs arising from legal challenges to or disputes about the merger have not been included," it said.

The costing, which was sought by Labor, assumes almost every merger put forward in 2013 by the Independent Local Government Review Panel was to go ahead instead of other options also detailed in the panel's report, like joint organisations.

The proposal to merge Botany Bay, the City of Sydney, Waverley, Randwick and Woollahra carried the highest upfront cost, at $37.6 million.

This figure was followed by $31.5 million to merge the inner-west councils of Marrickville, Ashfield, Burwood, Canada Bay, Leichhardt and Strathfield.

"IT and communications systems expenditure" was identified as the biggest cost, at 45 per cent, with employment transition costs put at about 20 per cent.

Labor's local government spokeswoman Sophie Cotsis seized on the figures as proof the Coalition's "Fit for the Future" reform package, which requires councils to consider voluntary mergers, was a "complete sham".

Advertisement

"The Liberals and Nationals' claim they are putting $258 million on the table to help councils merge – that is at least a $187 million shortfall of the true cost that has been confirmed by the PBO," Ms Cotsis said.

The briefing note also estimated the net cost of the mergers to be $114 million, noting most of the savings "will continue to accrue over the long term".

"Many of the proposed mergers may have a net benefit under a long-term horizon," it said.

A spokeswoman for Local Government Minister Paul Toole said reducing 152 councils to 38 was "not our policy".

But the spokeswoman declined to rule out whether some councils would be forced to merge, should the Baird government be re-elected.

"We have asked councils to put forward a proposal on how they will become Fit for the Future and we have offered a package of incentives of up to $1 billion," she said.

The parliamentary budget office based the estimate on a 2009 review of the costings of mergers in Queensland, where 157 councils were reduced to 73.

The modelling also assumed 30 per cent of the costs were related to the size of the merging councils, and the expected complexity of each merger.

Most Viewed in National

Loading