Council Mergers

I was very pleased to have led the successful campaign to save Lake Macquarie City Council from any merger with Newcastle City Council.

I was also pleased that we were able to retain the current Lake Macquarie council boundaries and not see parts of southern Lake Macquarie hived off to Wyong council.

Council amalgamations had been on the State Government’s radar for many years and in 2016 they offered councils many millions of dollars to amalgamate under its ‘Fit For The Future’ reform package.

The NSW Independent Local Government Review Panel had recommended that Newcastle and Lake Macquarie councils be merged, but I vehemently opposed that move, saying Lake Macquarie was big enough and financially solid enough to stand on its own.

Lake Macquarie is a well-run council and should not have faced being penalised for its effectiveness and efficiency by being forced to merge with Newcastle, which has a well-publicised debt burden and other administrative problems. A merger of the two councils would never have served the interests of residents in either local government area as it would have created a bigger bureaucracy and disregarded the distinctive characteristics of each city.

Wyong council had also sought to have areas such as Wyee and Morisset taken out of Lake Macquarie and into the Wyong council area. Again I fought hard to stop this from happening, and was successful in those efforts.

As we now know, Lake Macquarie City Council will continue to stand alone on its own very solid financial feet.

Here’s a copy of the Private Member’s Statement I made to State Parliament in 2015 before the Review’s recommendations were made:

Mr GREG PIPER (Lake Macquarie) [6.32 p.m.]: “I speak on behalf of what I believe is an overwhelming majority of Lake Macquarie residents who are opposed to the proposal for an amalgamation of the Lake Macquarie and Newcastle city councils. The merger was first proposed in the 2013 local government review and received a largely hostile reception from the ratepayers of both local government areas, not to mention the majority of councillors. Both councils proceeded to submit convincing cases to the recent Independent Pricing and Regulatory Tribunal [IPART] Fit for the Future review. By IPART's own reckoning, both councils met all significant criteria, including those for financial performance, sustainability, efficiency and infrastructure and service management. Yet IPART inexplicably found them "unfit for the future" on the basis that they failed to satisfy the scale and capacity criteria—a measure that is nebulous at best and manipulative at worst.
While my purpose here is to represent constituents of Lake Macquarie, I know many in Newcastle share their outrage at their council being declared "unfit for the future". This label is an insult to the many staff and elected councillors who have worked hard to make their councils effective, efficient and sustainable. I include myself as one of those, having served on the council for 21 years, and as mayor for 8½ years. But it is more than a slight. Unfortunately, the implications are much more serious than that because the Government, with the backing of IPART, is using the ambiguous and quite nebulous definition of "scale and capacity" to justify its clear amalgamation agenda for the cities of Newcastle and Lake Macquarie.
The problem with scale and capacity is that it is an entirely subjective measure, which is obvious in the way that neighbouring councils across the State have been assessed differently against the ambiguous target. In the Hunter, for instance, Lake Macquarie—the fourth most populous council in New South Wales—and Newcastle are unable to meet the scale and capacity criteria although they have population bases of about 200,000 and 160,000 respectively. Meanwhile, nearby Port Stephens with 67,000 people and Cessnock with 52,000 both got the tick. In other words, a council one-quarter of the size of Lake Macquarie, and rated at least equally on all other criteria, has the scale and capacity to be fit for the future but Lake Macquarie does not. I know I am not the only person who finds that farcical.
The IPART review was not conducted on a level playing field. For councils such as Lake Macquarie and Newcastle the starting point in their bid to prove themselves fit for the future was to prove that their preferred stand-alone option was better than the merger proposed by the local government review in 2013. That was always going to be an impossible task because their population forecasts were never going to meet that of the proposed amalgamated super council. This merger proposal might be slightly more palatable if there were some real justification offered, some evidence of the financial basis on which it has been put forward. All the IPART report offers in that regard is the dubious assertion that amalgamation of Newcastle and Lake Macquarie offers "significant" net present value benefits over 20 years. We do not know what "significant" means because the report does not offer any figures.
Lake Macquarie City Council has estimated that a merger between it and the city of Newcastle would cost $47 million during transition and lead to ongoing costs of some $28 million per annum, which is a 12.6 per cent increase for the ratepayers of Lake Macquarie. It asserts that the merger would diminish the region by reducing the capacity of both councils in the short and long term while creating a dramatic imbalance in the scale and capabilities of local councils, as I referred to earlier. The proposal is an insult to current and former residents who proudly identify with and have worked in partnership with their council to build their community. They are offended that the community has been relegated by this process to being less important than dollars, even though the Government's argument on that is shallow to say the least. There is no doubt that Lake Macquarie will lose its identity as a city if the merger goes ahead—an identity the council and residents have worked hard to forge. A merger will not serve our city. To use a football metaphor, Newcastle will get the jersey and all Lake Macquarie will end up with is the socks.
Lake Macquarie is not an extension of Newcastle. We have our own character, our own ways of doing things and our own vision for the future. A great deal of time and money has already been squandered forcing councils such as Lake Macquarie to defend perfectly good records of management, sustainability and financial performance. If they are fit for the future under every reasonable measure, the Government should do away with ill-considered amalgamation proposals. It should also honour its commitment to not forcing mergers and let those councils get on with building their communities. I will finish by commending the comments of Alan Jones, who is not somebody I would normally call on to support my argument. In his interview with the Premier late last week he really seemed to understand the importance of community. I wish this Government would reconsider its understanding of what community means.”