Merger push poses more questions than it answers


The push by the so-called Tasmanians for Reform group (in reality the Property Council representing big property owners) for council amalgamations in Tasmania leaves several critical questions unanswered.

Despite extravagant claims that wholesale forced amalgamation will somehow bring savings of ‘up to 35 per cent’ – something never previously achieved in any Australian amalgamation program – the group is notably silent on other important questions.

For instance, in its review of the 2007 Queensland experience with amalgamations, the Queensland Treasury Corporation gathered estimates by merged councils of the costs of their amalgamation. These amounted to $184.71 million and are still recurring. Given the prohibitively high costs of amalgamation, Tasmanians for Reform should tell Tasmanians who will pay for its proposed amalgamation program: Tasmanian taxpayers or Tasmania ratepayers?

Similarly, recent exaggerated claims on the other purported benefits of amalgamation raise awkward questions.  In particular, the Deloitte Access Economics Report asserts rates could fall significantly. But the recent Queensland experience represents a sharp reality check for this kind of wishful thinking. Consider the newly-merged Moreton Bay Regional Council which roughly approximates the Southern Tasmanian group of councils in size. Rate equalisation across Moreton Bay Regional Council resulted in steep rate increases for many people, with former Pine Rivers Shire ratepayers slugged with an18.1 percent increase! Should the Property Council and Tasmanians for Reform get their wish, ratepayers in low rates councils, like Brighton, should prepare for sharp rate increases!

The proponents of amalgamation should also come clean on councillor remuneration in a post-amalgamation Tasmania. Again the 2007 Queensland amalgamation outcome is instructive. Using Queensland Local Government Remuneration and Discipline Tribunal methodology, a new Greater Hobart Council with a population below 200,000 people would be ranked as a Category seven Council in Queensland, with a mayor, deputy mayor and 12 full-time councillors. The Greater Hobart Council mayor would be paid $171,436 (plus $3800 ‘amalgamation allowance’), the Deputy Mayor paid $116, 577 (plus $2650 ‘amalgamation allowance’), and each full-time councillor paid $102,862 (plus a $2370 ‘amalgamation allowance’). These costs do not even include vehicles for councillors, administrative assistance, and work-related expense claims!

Finally, Tasmanians for Reform is presented as some kind of popular movement, when in fact it is an ersatz body representing the special interests of the Property Council and its related business and developer groups rather than the broader public interest. Accordingly, in the interests of transparency, the group’s spokesperson, Mary Massina of the Property Council, should make clear to the Tasmanian public which organisations fund Tasmanians for Reform and what proportion of its budget is financed by the Property Council.

* Professor Brian Dollery is Director of the Centre for Local Government at the University of New England in Armidale, New South Wales.