Reform costs and savings unclear

The Western Australian Local Government Association (WALGA) has questioned the predicted costs and savings that would accompany the proposed reforms and amalgamations of local government in Western Australia.

A meeting of metropolitan Mayors and Presidents, hosted by the WALGA has initiated plans to heighten community awareness as to the likely costs of reform.

WALGA President Mayor Troy Pickard said there had been recent claims of minimal costs and substantial savings for the sector in reducing the number of metropolitan Local Governments.

“The government claimed last week that there would be savings of up to $75 million but the concern at yesterday’s meeting was that the opposite would be the case and that communities would be facing substantial rate increases to meet reform costs without adequate funding from the State Government.

“I believe a lot would be achieved if the State Government could provide some clarity as to how they have come about their financial projections and the basis for not giving due consideration to the findings provided by WALGA.”

At the meeting of Mayors and Presidents there was anxiety over the potential financial impact on communities with the State Budget allocating only $5 million per year for metropolitan reform and Council access to low interest loans.

“The sector is deeply concerned about the potential cost to communities if the State Government fails to meet its responsibility to fund the reform process.”

“Councils only have three options to meet the cost; increase rates, reduce services or sell assets, all of which are bad outcomes for the community.”

WALGA has urged that metropolitan reform will cost between $65 million to $100 million and should be funded by the State Government.

Mayor Pickard said the WALGA position was based on information supplied directly from counterparts in Queensland on the reform process in that State and on the costs of recent and proposed amalgamations in WA.

The Queensland Treasury Corporation reform review in 2009 found Councils put the median cost at $7.24 million; while the City of Geraldton-Greenough and Shire of Mullewa merger two years ago cost $5.5 million; and KPMG estimated in 2011 that the amalgamation of the cities of Subiaco and Nedlands would cost $4.1 million.

“If the State Government is able to demonstrate to the sector why the information we have used is false or that they have a more reliable insight, then we should have that discussion.”