Reverse the forced council amalgamations, no rate rises

May 4, 2021
Graphic: Joel Tarling

Back in 2016 residents across the three inner west councils were asked if they wanted to merge: their resounding response was “No”. The New South Wales Coalition government took that as a “Yes”, and proceeded with its amalgamation plan for Leichhardt, Marrickville and Ashfield Councils into the giant Inner West Council (IWC), all the while telling residents that it was the fiscally and socially “responsible” thing to do.

Fast forward to today and as the IWC prepares for its first election on September 4 — delayed a year because of the pandemic — its finances are a mess, the fourth council administrator has just been appointed and the Labor-Liberal voting pact has come unstuck.

Residents are increasingly angry that services have deteriorated, the new tree policy is environmentally destructive and council assets are being slated for sale or pepper-corn rentals to private corporations.

On top of all this, the “rate harmonisation” plan is about to kick in. Residents in the former council area of Marrickville will be forced to pay a substantial amount more. This, the government says will be “fairer”.

The Local Government Amendment Bill 2021 is set to go to the Legislative Council this session. Its main objective is to make the Independent Pricing and Regulatory Tribunal’s (IPART) recommendations on new rates lawful. IPART decided last September to set the rate peg for all NSW councils 2021–22 at 2%, down from 2.6% the previous year.

Rates are a council’s main general income stream, but councillors also have discretion in whether or not to increase it. In the Inner West, rates are also affected by land values determined by the Valuer General of NSW.

IPART says that when determining the rate peg — the change in the Local Government Cost Index — it takes into account the productivity factor and the cost of running the local government elections.

Councils can apply for a special variation to the rate peg and, following the outcry over rate hikes in the Marrickville area, the IWC has done so.

'My pension has not increased'

Residents were asked their views on the proposed rate structure and of the nearly 7000 people who responded, 76% said no. Sixty percent said no to the minimum residential rate of $850 — which is above the $820 business rate. They were also asked to write directly to IPART, making their case for a rate rise waiver.

“I notice my rates in the latest round have already increased by 10% since last year,” Brian I O’Toole wrote. “My age pension has not increased 10%. Any further increase will cause significant burden on my finances, limited as they are … at 74 years of age, in my own home, with little savings and no superannuation due to a lifetime of casual and intermittent employment my finances are already very tight, as the pension is only just above the poverty line…”

Further, he said that it appears that the government is “trying to make me sell up and move” which he does not want to do, because he is assisting an aging and infirm relative stay in their home.

Another petitioner to IPART on March 3 had similar concerns. “We had been given the understanding that Leichhardt Council would waive property rates for aged pensioners (like it used to do) but somehow ... an interest rate was to be levied against ALL arrears payers whether aged pensioners or not … The Inner West Council have replied that they are powerless to grant compassion to aged pensioners which I consider to be a load of hogwash. Of course they can. Not only that, the quarterly council rates notices show the amounts as owing and treat aged pensioners such as myself as council defaulters.

“The council even sent a letter of demand for payment! I am nearly 88 years of age and I recently lost my wife. We have been living at the above address for the past 50 years … I appeal to the Tribunal to give council rates relief to aged pensioners. The waiving of council rates for aged pensioners would be a great act of compassion.”

The minister for local government has substantial power over what council must do. But council has the power to levy special rates and it can grant exemptions “in certain circumstances”.

Labor unwilling to fight

The motion put to council on March 1 by Labor and supported by one of two Liberals (Vittoria Raciti) and independent Pauline Lockie won. It mandated the council to write to the Premier, Treasurer, Minister for Local Government and IPART, stating it opposes the rate “harmonisation”, noting the community opposition and calling for the new rates to be “phased in” over four years.

The motion also stated a preference for the minimum residential rate to be $850 and for businesses, $820. It said a failure to set these new minimums would result in a default rate of $565 “which will not equitably distribute the rate burden across the former council areas”.

A foreshadowed motion by Liberal Julie Passas, which was never voted on, supported the rate harmonisation but suggested lower residential and business rates (set at a flat $790).

The foreshowed motion from the Greens (which was also not voted on) wanted council to conduct a poll at the elections asking residents if they want to revert back to the previous council areas.

“Labor Mayor Darcy Byrne is on record opposing the amalgamation, but his motion was more a motherhood statement than a plan for action,” Pip Hinman told Green Left. “Byrne insists the NSW government has cheated the Inner West Council out of its deserved council grant in the controversial partisan scheme which Berejiklian defended as legal ‘pork barrelling'. But he won’t support residents being given a say.”

Hinman is the Socialist Alliance’s lead candidate in Damun (Stanmore) ward. The ticket’s platform calls for de-amalgamation and a residents’ poll.

“The amalgamation has been an expensive failure. We know that in just three years the IWC is in serious debt — to the tune of $124 million.

“Even if the large rate rises that look set to hit some residents, especially those in the former Marrickville Council, are phased in, this is not the way to deal with budget blow-outs.”

The People Before Profit ticket is also calling on council to work with residents to secure greater state government funding for the vital services it undertakes at a local level.

“If council believes that the rate ‘harmonisation’ is unfair, it needs to fight for an alternative,” Hinman said.

“And, if there is to be any harmonisation, it should be to lower rates to that of the former Marrickville Council, and for any resulting income shortfall be met by the NSW government which forced the amalgamation on us in the first place.”

Socialist Alliance is also calling for just and equitable rates including: automatic zero rates for pensioners, the unemployed, single parents, people with disability and others dependent on welfare payments.

It believes council should progressively means test rates on the basis of income: people should not be rated at the same level as landlords and speculators are for the sole home they occupy. It also criticised the base rate for businesses that, it said, should be higher than that of residents.

[For more information on the Socialist Alliance's People Before Profit visit the campaign page here, sign a letter to the minister for local government calling for the forced amalgamation to be scrapped and follow the Socialist Alliance Inner West campaign Facebook page. Sign on here to join the second bike ride for deamalgamation starting in Petersham.]

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