Authorities say claims that forced Council amalgamations drive down rates are not borne out by evidence from other states.

Local Government NSW (LGNSW) has told a NSW Parliamentary Inquiry into Local Government Reform that amalgamations actually drive up rates in other jurisdictions, including Queensland and Victoria.

“After the 2008 Queensland amalgamations, total council rate revenue in that state grew by 27.4 per cent, compared to NSW rate growth of 13.4 per cent over the same period,” LGNSW President Keith Rhoades said.

“As a result of nearly four decades of rate pegging, NSW actually has the lowest per capita rates of all jurisdictions except the Northern Territory.

“According to the Commonwealth’s most recent Local Government National report 2012-13, Victorian council rates average $692 per capita compared to $499 in NSW – a difference of nearly 40 per cent.

“This is despite amalgamations in 1994 that reduced the number of Victorian councils from 210 to 78.”

Cr Rhoades was giving evidence at the NSW Legislative Council’s Parliamentary Inquiry into Local Government in NSW, which is examining the Baird Government’s Fit for the Future reform proposals to dramatically reduce the number of Councils in NSW through amalgamation.

He says the Government has consistently claimed the Fit for the Future reforms are designed to drive down rates, improve infrastructure and provide better services, but there was no evidence to support its case.

“The argument that bigger is always better lacks evidence, and is in fact contradicted by a larger body of research and real life experience that challenges that proposition.

“The Australian Centre of Excellence in Local Government criticised the perception that municipal consolidation will result in gains through efficiencies in scale, saying there was clearly ‘insufficient robust research’ to support the proposition.

“More recent research conducted by Lake Macquarie City Council General Manager Brian Bell demonstrated no discernible economies-of-scale efficiencies in bigger councils, and found amalgamated councils did not deliver better performance than non-amalgamated councils on any of the Fit for the Future performance indicators”.

“Many have argued that the real efficiency gain from amalgamations is that the State Government and property developers simply have fewer Councils to deal with.

“Well that’s not a benefit to local communities, and it is not in itself sufficient justification for forced amalgamations.”

Cr Rhoades said independent polling by market researchers Micromex found more than 60 per cent of individuals in the Greater Sydney Basin wanted their Councils to stand alone, and less than one-in-five supported the Government’s proposed amalgamation option for their Council.

“So not only is there a distinct lack of evidence to support the Government’s claims, there is also hard evidence that forced amalgamations are strongly opposed by residents and ratepayers,” he said.