Australian Local Government Council Amalgamations: A Case Study of Clarence Valley Council, New South Wales

Abstract

Australian state and territory governments have frequently used the 'blunt instrument' of forced municipal mergers as a preferred method of local government structural reform. However, virtually no case study analysis has been made of the benefits and disadvantages of amalgamation in the Australian context. This thesis commences with consideration of local government structural reform in selected Anglosphere and OECD countries. Structural reform, specifically in the form of council amalgamation, is then addressed in the Australian context with a focus on the 1999-2000 voluntary and 2003-04 forced amalgamations in New South Wales. The New South Wales voluntary and imposed amalgamation process is considered for the case study, Clarence Valley Council (CVC) New South Wales. CVC is the result, in 2004, of the forced amalgamation of four general-purpose and two county councils. Such a detailed case study has not previously been undertaken in Australian municipal mergers. The case study establishes that there can be positive economic outcomes from amalgamation, and finds that there are benefits from economic rationalisation by assessing the available CVC financial data against 12 measurable indicators which have been used by advocates of amalgamation. The economic disadvantages of the amalgamation are considered and investigated. The primary thesis objective is to determine whether economic gains of structural reform, through amalgamation of local government in Australia, are achievable, even though the cost of service delivery may not necessarily be cheaper. The literature on economic aspects of amalgamation is considered and the financial outcomes of the CVC merger are empirically analysed. The thesis also examines theories of local democracy and, with CVC as its case study, considers how reduction in numbers of elected council representatives - a direct result of fewer council entities - has affected local democracy, and the mechanisms that have been applied to address such impacts. While some disadvantages are acknowledged, the CVC case study has identified a net financial benefit from amalgamation. The study has established that community engagement with CVC is significant only when matters are of direct and major concern to constituents. Despite this, a range of mechanisms has been used by the CVC to enhance local democracy.