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Democratically elected NSW councils sacrificed Part 2

Jamie C.

On the 11th June 2015, Save Our Councils (SOC) was formed at the Domain, Sydney. Its website describes it as “a non-aligned network of community groups, residents, business organisations, councillors and mayors from across the political spectrum and across the State publicly committed to preventing forced local council amalgamations.”

The Save Our Councils launch report said “The NSW Government wants to significantly reduce the number of councils and create ‘mega councils’ with populations in the Sydney metropolitan area of over 250,000 people and up to 500,000 – more than the whole population of Tasmania.

The report continued “The Save Our Councils coalition is calling on all MPs to show respect for their local communities and their right to participate in their local council.

Residents across NSW are strongly opposed to the Baird Government’s plan to force councils to amalgamate. Amalgamations should only proceed where the community of each local government area has voted in a referendum in favour of amalgamation.

Under the guise of the ‘Fit for the Future’ program the NSW Government is proposing to force local councils to amalgamate against the wishes of their local communities.

There is no rational case for mega councils at any level - economic, social or environmental. The overwhelming expert evidence is strongly against it. Bigger councils are not better.”

At the launch Nella Gaughan from the Save Our Strathfield residents group said “We love our local councils and we are going to fight to save them. 

Residents in many areas are worried about the impact of development and we believe that the program of forced amalgamations the Baird Government is planning is a vehicle for rapid and massive overdevelopment.”

“Over 80% of the Hunters Hill community supports its own independent council working with its neighbouring councils on efficiencies and strategic matters. That is the way forward for local government in this State,” said Phil Jenkyn from Save Hunters Hill.

“This is called SOC - Save Our Councils. The Government has declared war on communities and we are with the others going to stand up and give them a boot that will hurt forever,” Mr Jenkyn said. 

"Forced amalgamations are so unpopular, so anti-democratic, that everyone from the Christian Democrats to Labor to the Shooters and the Greens are standing together to oppose them in Parliament," Greens MP David Shoebridge said.

“Local councils are the only form of government properly able to acknowledge local values and deliver on local priorities. They are our most accessible and most democratic form of government,” Leichhardt Mayor Rochelle Porteous said.  

“The State Government is treating local communities and local councils with contempt,” she said.  

“This is taking democracy away from the community and will destroy local services and local jobs,” said Holroyd Mayor Greg Cummings.

The Deputy Mayor of Woollahra Council Greg Levenston said “If they want to amalgamate us they have to take down and bash down the walls, we are not moving”. 

Independent Mosman Councillor Carolyn Corrigan said “MPs should reject any legislation or government action forcing existing councils to amalgamate.”

"Any amalgamations will take away the local emphasis, councils will just get bigger and bigger. They would then become controlled by the Labor Party or Liberal Party," Christian Democrats MP Fred Nile said.

Online survey shows massive opposition to forced council amalgamations
The NSW Upper House GPSC6 committee investigating the FFTF program set up an online survey. The numbers, as published in GovernmentNews on July 30 2015, “are a bleak result for NSW Premier Mike Baird’s Fit for the Future agenda, with 75 per cent of the 795 respondents saying they did not believe amalgamations would improve the financial sustainability of their council and 73 per cent saying they believed council’s services would be compromised if a merger went ahead.” 

Greens MP and Local Government Spokesperson David Shoebridge said the results showed that the community was not convinced by the government’s push to create larger councils.

“This non-partisan survey confirms that the government has no community support to force council mergers on unwilling communities,” Mr Shoebridge said. 

Key survey findings were:

– 72 per cent of survey respondents did not support their local council being amalgamated
– 73 per cent believed council services would be compromised by amalgamations
– 75 per cent did not believe amalgamations would improve financial sustainability
– 75 per cent thought the current size of their council was appropriate
– 60 per cent do not believe that IPART’s assessment methodology is valid or reliable.

But while two-thirds supported local government reform, 74 per cent of people opposed forced amalgamations, even if IPART said these were necessary. 

University of Technology 2014 survey of attitudes to local government & amalgamations
“Why Local Government Matters” was a major piece of social research on community attitudes to local government undertaken by the Australian Centre of Excellence for Local Government (ACELG), University of Technology, Sydney Australia and published in June 2015. 

The research aimed to better understand how and why the activities of local governments, and their roles in society, are valued by communities.  

It presented the results of a comprehensive 2014 survey and included a congratulatory message by Warren Truss, then Deputy Prime Minister and Minister for Infrastructure and Regional Development.

Similar results were obtained in this survey as in the previously-mentioned online survey.

There were 2006 respondents.

On the question as to which tier of government was best placed to make local decisions, 74.7% said Local government, 15.8% said State government, 2% said Federal government, and 7.5% Don’t Know.

When asked what affect amalgamations would have on their representation by Councillors, a significantly greater number (43.7%) thought their representation would be worse or much worse than those (9.2%) who thought their representation would be better or much better.

Similarly, when asked what affect amalgamations would have on the cost of council rates, 43% said the rates would be worse or much worse, whilst only 17.6% said better or much better.

Submissions to the NSW Upper House GPSC6 inquiry into local government
Below, I’ve provided brief summaries of some of the submissions with critical comments. All expressed agreement with a reform process but not with forced mergers.

The Greens submission 
The submission’s opening remarks summarise the Greens position: “Local government is the level of government most closely connected to the community and is best positioned to identify and respond to community needs. It is an essential component of democracy. Any changes to local government in NSW should strengthen, rather than weaken, the bonds and connections between local councils and residents.

One of the core principles of the Greens NSW is participatory and grassroots democracy. This means we have been long-time supporters of local government in Australia and in particular the Local Government Act 1993 NSW (LG Act).

The NSW LG Act has set the standard for open and participatory local government across Australia. Local government in NSW is more open and accountable than in any other State. The LG Act requires that Councillors are more accountable than State or Federal Members of Parliament.

The Greens NSW believe that it is local residents who must have the right to determine what occurs in their local community and that an amalgamation should occur by way of a community referendum. Any amalgamations undertaken in NSW should only be considered if they are voluntary.”

This submission shows the strengths and weaknesses of the Greens’ position. 

The submission is in general excellent: well-planned, logically presented, and evidence-supported.

However, its wholesale support of the Local Government Act 1993 NSW fails to mention the point made by the LGNSW, and alluded to earlier, that this act provides measures that facilitate forced dismissals and the subsequent appointment of administrators. 

The United Services Union (USU) submission 
The USU’s submission expressed opposition to forced amalgamations on the following grounds:

•    Forced amalgamations are undemocratic and are an example of the state government intervening in an otherwise democratic body politic without the consent of voters.
•    In the past forced amalgamations have had a regrettable impact on the relationship between councils and their constituents.
•    The organisational turmoil created by a forced amalgamation takes years to undo and generally creates an entity which is not fit for purpose. This is because forced amalgamations inherently involve decisions which are made without the benefit of consultation or local planning.
•    Forced amalgamations tend to lessen the ability of civic, religious, sporting, recreational, political and community groups to engage with decisions at a local level. 

Such groups have significant and complex interactions with local government and are amongst the most affected by merger. Forced mergers are done without reference to the needs of these groups. 

•    The employment and service delivery impacts of forced amalgamations are serious and highly detrimental. Forced mergers push multiple organisational structures together instantaneously. This results in mismatches in resourcing, reductions in the quality of service delivery and the loss of jobs. 
•    Forced amalgamations are expensive and entities which are forcefully amalgamated tend to perform poorly and inefficiently.
•    There has been no indication from the government that, in the event of forced mergers, merged councils will have access to the amalgamation incentives. As such, merged councils will likely have to contend with the immense administrative, legal and operational costs of amalgamation without assistance.

This submission raised an important point not mentioned in the other submissions that I’ve summarised, namely that the employment and service delivery impacts of forced mergers is highly detrimental.

The Save Hunters Hill Municipality Coalition (SHHMC) submission

SHHMC is a community organisation within Hunters Hill determined to maintain its historic Municipality (1861) and keep the local in local government. Local residents highly value the area’s significant heritage and its sense of belonging, and are determined to keep their local community and democracy. SHHMC supported their council cooperating with neighbouring councils on efficiencies and regional matters in a Joint Regional Organisation.

SHHMC was established in 2003 to prevent the then attempt to amalgamate the council. It was reactivated in December 2012 to combat a renewed threat to its independence by the State Government. 

The SHHMC submission indicated that both LGNSW and the Australian Local Government Association have a policy of no forced amalgamations, and made the following point: “What the NSW Government is doing in its ‘Fit for the Future’ proposal, by seeking councils to meet the scale of a Mega Council, and by offering incentives for mergers, is trying to force amalgamations by the back door. Whether it is the back door or the front door this is a direct attack on local democracy and is totally unacceptable to local communities.”

The SHHMC referred to a number of expert witnesses, who looked at the merger option proposed in the Sansom Report as favoured by the Government; a Mega Council of over 300,000 people consisting of six existing councils –Hunters Hill, Lane Cove, Mosman, North Sydney, Ryde (part of) and Willoughby. They also considered other and improved options. 

Professor Brian Dollery provided an empirical analysis of collaboration and shared services; Professor Percy Allan & Associates considered the structure of a regional organisation; SGC Economics provided a business case for a Joint Organisation; and Morrison Low carried out a review of the Sansom recommendation.

Professor Allan found “There is no compelling evidence that centralising all local council activities in a single mega-council produces cost efficiencies. That’s because with scale some activities obtain economies while others develop diseconomies. Hence the most efficient path for local government is to share those activities that benefit from size while keeping in-house those activities done best on a small scale.”

Professor Brian Dollery in the conclusion to the report ‘Compulsion versus a Collaborative Regional Approach’ May 2015 at p264 states: “there is no empirical justification for the proposed merger of the Hunters Hill, Lane Cove, Mosman, North Sydney, Ryde and Willoughby local councils” and at p265 “that no common ‘community of interest’ exists.” 

At p267 the report states “The weight of empirical evidence on municipal mergers in the scholarly literature and the Australian national and state public inquiries into local government falls overwhelmingly against forced amalgamation .

This body of evidence holds that shared services and other forms of council collaboration provide a superior method of securing the advantages of greater scale.”

Random telephone survey
The result of a random telephone survey was that over 80% of the community in Hunters Hill supported the model of keeping its own local Council and in addition cooperating with surrounding councils in a joint regional organisation. 

At the Community Forum held in May 2015, over 80% of those present were supportive of retaining the Council and exploring the possibility of a Joint regional organisation with a number of other councils within the northern Sydney region.

The Conclusion to the Upper House GPSC6 inquiry
The NSW Upper House inquiry was concluded on the 29 October 2015, 9 days after the IPART report was released.  There were 206 written submissions. 

An online questionnaire, available for about a month, received 795 valid responses.

Six public hearings (three in Sydney’s Parliament House, and one each in Cobar, Wagga Wagga & Armidale), and 2 public forums (one in Sydney & one in Armidale) were held. 

The inquiry resulted in 9 findings and 17 recommendations. The most relevant to this report are given below.

Finding 1:  While the Independent Pricing and Regulatory Tribunal (IPART) has significant capacity to analyse the finances of local government it does not have the demonstrated skills or capacity to assess the overall ‘fitness’ of councils as democratically responsible local bodies.
Finding 2: That the Independent Pricing and Regulatory Tribunal’s appointment to the role of Independent Advisory Panel occurred too late in the Fit for the Future process and that the 30 June 2015 deadline for council proposals was too short.
Finding 5: That the scale and capacity criterion was a flawed criterion and it should not have been included in the Fit for the Future assessment criteria and accordingly assessments of councils’ fitness based on this threshold criterion are not well-founded.
Finding 9: That the projected economic benefits of council amalgamations have been consistently overstated by the proponents of forced amalgamations and the costs and extensive diseconomies of scale caused by amalgamations have not been adequately explained by those same proponents.

Recommendation 1: That the Premier and NSW Government withdraw the statements that 71 per cent of councils in metropolitan Sydney and 56 per cent of regional councils are ‘unfit’.
Recommendation 11: That the NSW Government commit to a policy of no forced amalgamations of local councils, except in circumstances where it can be established that a council is severely financially unsustainable to the point of bankruptcy or unable to maintain an acceptable level of service provision.
Recommendation 17: That the NSW Government work with local government on a statutory model for Joint Organisations based on the Hunters Hill, Ryde and Lane Cove Council model as a cooperative and consensus model for local council reform in Metropolitan Sydney.

In short, the GPSC6 inquiry exposed the flawed Fit for the Future process based on forced amalgamations & mega-councils, criticised the claimed economies, and in Recommendation 17 proposed a better, cooperative approach.

Baird hires the reliable KPMG again to do a job for him
It’s a hard world for Mike Baird. 

He promised his developer mates the goods—a few mega-councils instead of many smaller councils to negotiate with—but he had to consider that he might fail to deliver.

After all, his chosen review panel head, Professor Graham Sansom, just turned round and bit the hand that fed him.

For Samson had the temerity to criticise, in a submission to IPART, both the Baird administration and IPART for cherry picking the ILGRP “Revitalising Local Government” review, known as the Sansom Review, for changing the strategic objectives, and for simply following the amalgamations’ road only rather than looking at alternatives. 

So Baird needed a report from an “independent” source that would back his proposals including his choice of council amalgamations. On June 29, 2015 he gave the contract to KPMG.

A leaked 8th July 2015 cabinet-in-confidence not-for-circulation “Options Analysis” report from KPMG shows that it was involved in the Coalition’s forced amalgamation process before IPART had even completed its Fit for the Future review of councils.   

As David Shoebridge, Greens Upper House member put it: “It is clear from this that since at least July 2015, the Baird Government knew which councils it wanted to amalgamate.” 

“Far from KPMG providing an ‘independent’ review of the government’s financial claims, it’s now clear that they were involved since at least July 2015.  

The Government had engaged KPMG to do a job on local councils and communities.   

This shows the entire process to be a farce, with the government having already decided which councils would merge and then working backwards to come up with some mythical savings to justify their decision.   

Even for the low standards of NSW politics, this stinks… 

Every step of this contorted and deceitful path was mapped out in the Premier’s Department. Mike Baird owns this debacle.   

This doesn't just affect the councils that are in court, it could dismantle every single one of Baird’s forced amalgamations.   

This makes it clear why the government has been working so hard to hide these documents; they show that from day one the entire financial analysis was based on political objectives.”

Baird announces new anti-democratic laws to weaken the right to protest 
In March this year, Baird announced tough new laws giving police greater powers to search, seize and move on protesters without warrant.

The new laws also increased fines for illegal entry to mining and coal seam gas sites from $550 to $5500 and could see anti-CSG protesters jailed for up to seven years.

Later that month, in a move blasted by civil rights groups, Baird announced a set of draconian new laws that allow anyone to be locked up for 14 days without charge, including children as young as 15. That’s anyone, plucked off the street with no charge, and held captive for 14 days. 

Baird, the ex-Banker, knows how important it is to have the best possible laws to control the mob in the interests of business growth & development. 

This is very much a part of class war in New South Wales even though the gentlemanly, smiling Mike Baird, would never use such an expression. 

As Lachlan Phillips asks in his piece ‘From Baird to worse: How Sydney was stolen by corporate coup’, “What could be coming up that would require such a comprehensive plan to squash protesters and detain without charge?” 

The WestConnex Gerrymander
As Phillips exposed, the forced amalgamations on May 12 this year, “replaced elected councillors with administrators at a crucial time in WestConnex’ approval process. Many councils have blocked approval due to concerns from their constituents.” 

These councils were removed and the councillors can’t contest this until elections in September 2017.

In areas such as Parramatta and the surrounds there are a combination of Labor, Liberal and Independent Mayors and Councillors.

These Councillors were all fired and a Liberal Party “Administrator” was installed such as Amanda Chadwick who provided an uncontested path through much of WestConnex Stage 1.

Similarly, in Leichhardt, the Labor Mayor of Marrickville, Sam Iskandar, one of the most vocal critics of WestConnex, was unceremoniously removed from office, and in his place Baird installed WestConnex’ own, Richard Pearson — a high level member of the Department of Planning in charge of the development. 

Yes, an elected councillor opposed to the development was replaced by force with an unelected high-level WestConnex official!

This, of course, will ensure that effective opposition to the Stage 3 development going through Newtown will be blocked allowing the proposal to pass by decree.

As Lachlan Phillips demonstrated with the map below, “The new zonings for all three stages have been set up to border the proposed WestConnex routes accurately. The maps line up. Relevant zones are now controlled directly by Baird’s own council dictators with the exception of court contested regions.”

People have been forcibly evicted from their homes and businesses, and the first properties bulldozed. According to Lachlan Phillips, “properties all along the WestConnex route were secretly undervalued, with a $100,000 report being hidden from the public. The valuation of this land theft is in the millions, with many people being left drastically out of pocket.”

Who profits?
An excellent investigation by Wendy Bacon, a professorial Fellow at the Australian Centre for Independent Journalism, found that Leighton Holdings (who changed their name to Cimic Group in 2015) was awarded the largest share in all three of the Baird Government’s construction tenders for WestConnex, worth more than $8 billion.

Spirit of Eureka (NSW) has already exposed how Leighton/Cimic paid no tax in 2013-14 on over $14 billion income and that it had very dirty secrets revealed by whistle-blower former Leighton senior executive, Stephen Sasse. 

Sasse had warned Leighton’s board of bribery, corruption and fake agreements moving millions to foreign subcontractors, but the board didn’t want to know about this and Sasse was ‘pushed out’.

Under the Coalition’s watch, massive corruption by Cimic went unpunished because the Australian Federal Police lacked funds to investigate.

So Leighton was never punished for its crimes within Australia and under its new, clean “Cimic” name was instead rewarded with WestConnex, a nice fat multibillion dollar development contract. 

Such is the hard life of entrepreneurial risk for one of the BCA’s biggest corporations with operations in 20 countries!

Returning to Wendy Bacon’s WestConnex revelations, “the NSW Government made a mockery of the process created to ensure environmental checks and balances – the NSW Department of Planning assessed and approved an Environmental Impact Statement (EIS) after the contracts were awarded.

The EIS, which included crucial traffic projections for Stages One and Two of the project, was produced by global engineering company AECOM.

The economic justification for the entire project – not to mention the traffic congestion, air quality and noise predictions – rests on the accuracy of AECOM’s predictions.”

In case you might think that AECOM and the development process is at least not corrupt like Leighton, read on. 
“AECOM was not only responsible for the EIS, but also has deep commercial interests in the development of the WestConnex project.

By October last year, it had been awarded more than $33 million worth of engineering contracts including for the Stage Three tunnel linking the M4 East and New M5 tollways, for which there is as yet no EIS.

Since WestConnex was transferred to the publicly-owned private company the Sydney Motorway Corporation, its contracts have not been published.

To get a handle on AECOM’s honesty, we can look at the Clem7 tollway in Brisbane. The Clem7 traffic projections by AECOM were for more than 60,000 vehicles a day within a month of opening, and 90,000 after 6 months.

Five months after opening, the tunnel was used by 27,000 vehicles a day, despite the toll for cars being cut to $2 from the projected charge of $4.28.

Last year AECOM paid out $280 million to settle a parallel class action arising out of the Clem7 fiasco.

In the US, AECOM became involved in four toll-roads projects with the Australian company Macquarie Bank, also involved in WestConnex.

These projects also ended up in court because the finance company Syncora, which provided the insurance, sued in the New York Supreme Court claiming “fraudulent misrepresentations of the objectivity of traffic and revenue forecasts”.

In a judgment published on July 1, 2013, New York Supreme Court Judge Melvin Schweitzer found that there was evidence an undisclosed scheme of “success fees” from Macquarie to AECOM incentivised it to boost up traffic forecasts.

According to Judge Schweitzer’s judgment, “These under-the-table success fees amounted to additional millions of dollars per transaction, and were paid in connection with the American Roads transaction as well as many others. None of this was disclosed to Syncora which was instead led to believe that was an objective adviser on whom it could, and did, rely.”

So the basis of the economic justification for the WestConnex project relies on the accuracy of AECOM’s predictions. 

But wasn’t AECOM already shown to be dishonest in its New York predictions? And wasn’t AECOM already forced to pay out $280 million for its way-off-the-mark Clem7 predictions?

FFTF Council amalgamations also hit rural NSW 
IPART’s final report was released on the 20 October 2015.

IPART’s assessment that 71% of Sydney metropolitan councils and 56% of regional councils were “unfit”, with the impending threat of forced amalgamations, caused a massive backlash even from Coalition MPs.

The conclusions of the NSW upper house inquiry have already been noted.

Instead of choosing the inquiry’s recommendation 17, “That the NSW Government work with local government on a statutory model for Joint Organisations based on the Hunters Hill, Ryde and Lane Cove Council model as a cooperative and consensus model for local council reform in Metropolitan Sydney”, the Baird administration implemented forced amalgamations with dismissals.

Bitter backlash from Coalition MPs in marginal electorates to the May 12 dismissals
As reported in the Sydney Morning Herald 12 May 2016, Liberal MP, Nickolas Varvaris, whose electorate of Barton falls into the newly-formed Georges River Council, Canterbury-Bankstown Council and Inner West Councils said the mergers provide “nothing but personal, political benefit to a small cabal.” 

“The contempt that Mike Baird, Paul Toole and the NSW government have shown towards the electorate is nothing short of breathtaking and displays how out of touch they collectively are", he said.

At an earlier March meeting of Kogarah council, Varvaris, who sits on the council, moved a motion against the state government's plans to merge the council with Hurstville.

He instead moved a motion calling for the state government to merge the council with Rockdale and Hurstville councils.
Andrew Gee, the Nationals candidate for the federal seat of Calare and the state member for Orange, said councils had been "thrown under the bus".

"I do not believe that there was appropriate consultation with individual MPs prior to this announcement being made, and I made this known to the Premier before walking out of the meeting," Mr Gee said.

Well, there you have it, from the horse’s mouth: A NSW Liberal MP says publicly that Liberal NSW Premier Mike Baird shows breathtaking contempt of the electorate, and describes the mergers for what they are, and a National MP, state member for Orange, walks out of a meeting with the Premier in protest at the lack of consultation!

Special treatment for Barnaby Joyce’s electorate
The bitter Coalition backlash even included the Deputy Prime Minister. Walcha Council, in the state’s north, which falls in Joyce’s electorate, and Oberon Council in the NSW central tablelands intended to petition the state’s Land and Environment Court to declare invalid the forced merger process. They were joined by Cabonne Council in NSW’s central west.

Joyce, who faces a fierce challenge from high-profile independent Tony Windsor for his seat of New England, took up their cause on behalf of constituents deeply opposed to the mergers. 

He met with Baird and his deputy, attended public rallies in Walcha and wrote to the NSW Minister for Local Government.

“I’ve made my views abundantly clear that a place such as Walcha, which is financially viable, which is geographically distinct, which is socially distinct … shouldn’t be forced to amalgamate,” Mr Joyce said.

On the 18th May 2016, the NSW Government capitulated and announced that Walcha Council will remain a stand-alone local government body.

“This is a great victory for the Walcha community led by the Council’s very capable Mayor, Cr Janelle Archdale,” Joyce said.
 “Cr Archdale reached out to her community, and represented them so strongly in their fight to remain independent.

I want to praise the Walcha community for their effort and turning up to campaign so strongly and I think the State government has recognised what a strong independent community Walcha is.

I have never supported the merger and this is a just outcome,” he said. 

Of course, other “financially viable, geographically and socially distinct” regional councils have been forced to merge as, for example, Guyra Shire Council and the Armidale Dumaresq Council.

Forced amalgamation of Guyra and Armidale Dumaresq councils have angered a usually conservative Guyra community. This community wants no part of amalgamation with Armidale as indicated in countless meetings to voice their concerns.

But the Guyra residents’ wishes have been simply ignored by the Baird development steam-roller. 

The special favour given to Barnaby Joyce for his electorate no doubt helped him retain his seat in the recent federal elections.

This class struggle is important for all Australia not just NSW as it shows capitalism in its imperialist stage with the gloves off.

It is a continuation of the struggle waged in other states.

It is not over yet.

On the one side we have giant & fraudulent multinationals such as CIMIC and AECOM, the big business organisations such as the BCA, PCA, HIA, Sydney & NSW Business Chambers and their most reliable parliamentary servants such as the ex-banker, Michael Baird.

On the other side, we have a very broad range of the Australian people including workers, unions, Save Our Councils activists, residents, local councillors and the LCNSW, university professors & researchers, journalists, non-parliamentary political activists, non-Coalition parliamentary party representatives, and even conservative radio personalities such as Alan Jones—all opposed to the forced mergers that, in the interests of big business and developer mega profits, weaken even further our very limited democratic representation.


Democratically elected NSW councils sacrificed Part 2
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