The state government has ignored recent evidence form Queensland that council amalgamations almost never save money, according to Brian Dollery, a professor of economics.
The state government wants to amalgamate many councils across New South Wales, including Hawkesbury and The Hills, because it claims there will be massive monetary savings.
However, Professor Dollery from the University of New England, and who is also the director of the Centre for Local Government, said there was a mountain of evidence which showed council amalgamations almost never saved money.
He pointed to Queensland, when in 2007 and 2008, then premier Peter Beattie forced many councils to amalgamate.
Professor Dollery said it was quite clear that amalgamations in Queensland had not worked and in fact some councils had now “de-amalgamated”, but said the NSW government had not examined what happened in Queensland.
“If you look at the analysis for the Hawkesbury, it is expected to save millions,” he said.
“The reason the analysts didn't look at Queensland is because if you factor in the real costs of amalgamation it is not financially beneficial.”
Professor Dollery said he saw two main problems with the state government’s proposal, released in January, for the Hawkesbury.
The first was that the costs of the amalgamation were not revealed, among with a number of other important details like what would happen to assets and where the council headquarters would be.
The second was that the modelling used by KPMG, which claims the amalgamation would save $54 million over 20 years, was not stated.
Professor Dollery said it was curious that the state government’s proposal for the Hawkesbury, did not state what the costs of amalgamation were.
He said it was likely that the actual costs of amalgamating would rival the estimated savings.
“There is no mention of the costs of mergers at all. What is going to happen to existing assets and liabilities, where the council headquarters will be and so on,” he said.
“There are no details provided of the modelling so people like me can't look at its plausibility.
“I understand to get the modelling out of the Local Government Authority, you need to put in a freedom of information request. That is how transparent they are. Why can't people like me have a look?”
Professor Dollery said there was no doubt rates would go up in the future if an amalgamation happened in the future.
“Rates will go up, the question is by how much,” he said.
“There aren't going to be any cost savings, it will be very expensive, and as we have seen in Queensland and when this happened last time in NSW. There won't be an improvement in performance for things like infrastructure rollout.”
