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Council Amalgamations

March 15, 2016

The Christmas time (while you are on holidays) announcement by Premier Baird about forcibly merging local councils (read Shoalhaven and Kiama) should be of acute concern to residents. Already too late for public submissions to be accepted the government appear to be hell-bent on going on with a reform process that has been widely condemned. The government wants Shoalhaven and Kiama to merge by 2016/2017. For residents of the Shoalhaven the proposed merger is likely to have a huge impact.

Whilst both Kiama and Shoalhaven City Council are opposed to the merger in its current form, it appears only Kiama Council has seen the necessity to properly inform its residents of the likely impacts the proposed merger will have. Soon after the government’s announcement Kiama Council quickly allocated $50,000 for a public awareness campaign which has included two mail outs to its residents, whilst here in the Shoalhaven we have had to rely on Council’s website. Indeed had it not been for independent Councillors Guille, Watson and Findlay who called an extraordinary council meeting on January 25, we still might be waiting for Team Gash to react.

Council’s position on the merger has been left largely to General Manager Russ Pigg to explain. According to the merger document estimates, the financial benefits to council will be” on average around $3 million in savings every year from 2020 onwards.”  To help put this in context Shoalhaven City currently operates a $300 million budget. Mr Pigg has also raised the important issue of the future of Shoalhaven Water with its potential loss of over $7 million in revenue currently gained by council from its operation. His sobering remarks include that whilst Shoalhaven council had met the Fit for the  Future benchmarks, with the government’s proposed rate freeze the merged council will become “Unfit for the Future”.

The Baird Government’s carrot for merging councils has been the promised 4 year rate freeze. Whilst Council needs to raise $21 million in increased revenue over this period to offer the current level of services and expenditure, it will now be left with a deficit of $11 million after receiving the government’s $10 million in compensation. Obviously once the rate freeze is lifted rates will soar with estimates putting some expected rate increases to be as high as 50%.

The costs to implement a merger are another issue. Using the KPMG modelling council expects to suffer a further $4 million loss after receiving the proposed government subsidy. If Russ Pigg is right the promised financial gains appear to be largely illusory. It will also mean significant job loses with 82% of the savings coming from staff reductions.

Social impacts.

Social impacts are seldom properly considered by government. As state MP Gareth Ward has pointed out: “Whilst Kiama and Shoalhaven are neighbours, theirs is literally a tale of two cities. Both beautiful but both very different.”

The socio-economic factors indicate that Kiama is more prosperous than is the Shoalhaven. This is reflected in the higher rates Kiama residents pay and in the additional services their residents enjoy. It in turn will add upward pressure to Shoalhaven rates, which have been kept lower due to our poorer circumstances.

Our two communities also are geographically somewhat dislocated. As Ward has pointed out Kiama residents tend to rely on local services or look north for employment, health, schools, shopping and other needs.

The linear nature of the Shoalhaven’s boundaries, already a problem with its scattered towns and villages, would be further exasperated. Kiama is a considerable distance from Ulladulla. Communities need a sense of belonging. Shoalhaven City is much larger and has five times the population of Kiama Council.  Social cohesion, even if possible, will take decades to achieve. These are the kind of reasons that residents do not wish governments to force change upon them.  ■

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