Council submissions on merger costs also need to address savings

Local Government Minister Warren Pitt says he looks forward to receiving the Rockhampton Regional Council’s submission justifying its claim for extra funding to cover amalgamation costs.

Mr Pitt, who met with the council this week, said any submission the council put forward needed to also address the question of savings the council stood to make as a result of the former Rockhampton, Fitzroy, Mount Morgan and Livingstone councils being merged.

“I will certainly be interested to receive and review the council’s submission. I’m yet to be convinced it does have a case for additional State Government funding.

“Experience elsewhere has shown that savings arising from operational efficiencies and economies of scale outweigh the costs a council may incur as a result of being amalgamated with another council,” Mr Pitt said.

“It has been reported that the bill for merging the four former councils, with a combined population of 110,000, has grown to more than $8 million.

“I have yet to see the details of this claim, but no doubt it will all be set out and explained in the council’s submission to the State Government.

“It is worth comparing Rockhampton’s claims with the new Moreton Bay Regional Council, which saw three former councils with a population of more than 330,000 merged.

“In its first budget, Moreton Bay Regional Council has delivered savings running into millions of dollars through operational efficiencies and economies of scale, and has effectively provided ratepayers with a 2.4 per cent rates rebate,

“There are definitely savings to be made through more efficient business systems, rationalisation of plant and equipment and reduced costs associated with buildings and other operations.

“Even if the claim of $8 million in costs for Rockhampton Regional Council can be substantiated as genuine amalgamation-related costs, it represents less than six per cent of the council’s annual operating expenses of around $140 million.

“When you factor in a modest annual saving in the order of 3.5 per cent, the one-off costs would be paid off within three years, with the ongoing savings going straight into the council’s coffers.”

Mr Pitt said the government would continue to work closely with councils to ensure no council was unfairly disadvantaged as a result of amalgamation.

Media contact: Minister Pitt’s Office 3227 8819