Review of Local Government


Local government in NSW needs a new agenda and a fresh start. 

For far too long local government has been bogged down in debates about amalgamations, rate-pegging, cost-shifting and demands for additional State and federal funding. Meanwhile the financial sustainability of many councils – and their capacity to deliver the services communities need – has declined, and a significant number are near crisis point. Local government is far from realising its potential to help achieve the State government’s goal of ‘Making NSW Number One’.vernment – ILGRP Final Report – October 2013 According to a recent review, local government in NSW needs a new agenda and a fresh start.

Nowhere is this more evident than in the Sydney region, where the structure of local government has been largely ‘snap frozen’ for more than half a century. Australia’s global city is still divided amongst forty-one councils, many of which lack the scale and resources to play an important role in metropolitan affairs. There is also a deepening divide between a privileged east and a struggling west. Gaps in coordination amongst State agencies have made matters worse.

The Independent Panel that conducted the review has highlighted the need for a systems approach. The challenges facing local government can only be addressed successfully through a package of measures: the jigsaw has to be assembled correctly to create a clear picture of the way forward.

Thus the Panel’s objective is to create a revitalised system of local government that will remain sustainable and fit-for-purpose well into the middle of the 21st Century. For that to be achieved, the old debates and slogans must be put aside. The time has come to tackle the underlying issues.

Sooner or later amalgamations will have to be part of the package: the number of councils in NSW has halved during the past century and that trend will surely continue. Rate-pegging should be reviewed in the context of a wider effort to address infrastructure backlogs and ensure financial sustainability. Cost-shifting has been overstated relative to other factors, but local government does have legitimate concerns about rating exemptions and concessions, and the way some fees and charges are fixed below cost.

The Panel’s approach has been evidence-based and pragmatic, not ideological. Its recommendations blend economic rationalism with a firm belief that more must be done to enhance social equity. Similarly, a strong commitment to local identity and democracy does not rule out creating larger council areas to improve efficiency and effectiveness.

The Panel sees encouraging signs of an understanding that things must change. This can be found in the Destination 2036 Action Plan, the joint local and State government initiative to ‘create strong communities through partnerships’. The formation of a single local government association also offers an invaluable opportunity to set a new agenda, as do moves by several State agencies to establish more productive working relationships with councils.

Local government has lots of people with the talent, drive and commitment to make the changes required. The Panel has heard many times that this review offers a ‘once in a generation’ opportunity: an opportunity to advance both local government as an institution and the wellbeing of the communities it serves. Much of what the Panel has proposed echoes the findings of the ‘Barnett’ committee that examined NSW local government exactly forty years ago. Not enough was done to follow through on Barnett’s work. This generation must do better.


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