Ball is in councils’ court to justify additional amalgamation funding

Local Government Minister Warren Pitt says he strongly doubts that the State Government will need to provide any additional assistance to amalgamated councils to meet merger costs.

Mr Pitt said the State Government had indicated to Councils several months ago that it would consider any submission for funding on top of the $27.1 million it had allocated.

“To date, we have not received any submissions from councils that were amalgamated with other councils.

“I have been saying for months now that the State Government will examine any submission relating to amalgamation costs faced by councils.

“The only condition that the State Government has stipulated is that councils must also put on the table the savings that will arise from efficiencies and economies of scale arising from merged council operations and rate bases.

“Experience elsewhere in Australia has shown that where mergers have occurred, typically the savings outweigh the costs.

“The costs are generally one-off costs – and approximately one per cent of the merged council’s budget – while savings can be between 2-5 per cent, and these savings are recurrent. That means they are achieved not just once, but year after year, after year.

“Obviously, no two councils are going to be the exactly the same in terms of what makes up their costs and savings and how much money is involved and over what period of time.

“However, what has consistently been the case is that the savings outweigh the costs.

“This has been borne out by the new Moreton Bay Regional Council, which in its first budget recently was able to identify merger-related savings of 2.4 per cent.

“This is why I am reasonably confident that the State Government will not have to make any additional payments to councils over and above the $27.1 million it has given out.”

Mr Pitt said any submissions received from councils would be carefully considered.

“We definitely will be taking a good close look at these submissions to make sure that any costs nominated are actually related to amalgamations – that is, they are not costs that the councils would have faced irrespective of any mergers.

“We will also be going through them to be sure that the issue of savings has been properly addressed.

“The State Government’s funding assistance for councils so far has been generous, and there will need to be a very convincing case made out for any additional funds to be approved.”

“The ball is well and truly in the councils’ court on this matter. While there have been a lot of claims and comments made, there has been a conspicuous shortage of one thing – facts and figures to show that councils are going to be worse off financially because of the costs associated with amalgamation,” Mr Pitt said.

Mr Pitt said the Department of Local Government was considering a submission from Logan City Council.

“Logan City Council is in a different situation in that it had areas transferred to it from the Gold Coast City Council and the former Beaudesert Shire Council – as distinct from being amalgamated with another council – and these aspects are being examined,” he said.

Media contact: Minister Pitt’s Office 3227 8819