The Guardian December 12, 2001

Money talks in Sydney council mergers

by Peter Mac

Residents and councils of three inner-Sydney local government areas (LGAs), 
Leichardt, South Sydney and Woollahra, are fighting to prevent a proposed 
incorporation of parts of these areas into the Sydney City Council (SCC) 
local government area.

Last week the merger as proposed by the Carr State Government was 
forestalled by the NSW Land and Environment Court, which decided that South 
Sydney Council had not had sufficient time to examine the proposal in 
detail. Leichhardt Council has a similar court action pending.

The merger proposal has been bitterly contested by the two smaller councils 
and their ratepayers since it was announced two weeks ago. If it proceeds, 
the move will result in some of the most lucrative ratepaying areas of both 
councils going to the SCC, whose coffers are already bulging with rate 
revenues from the Central Business District.

South Sydney Council is particularly badly affected by the proposals. For 
them, the boundary changes would involve the loss of 12 suburbs, including 
the wealthy areas of Potts Point, Woolloomooloo, Kings Cross and 
Rushcutters Bay, and leave them with the largely poor working class and 
industrial areas of Alexandria, Beaconsfield, Darlington, Erskineville, 
Redfern, Roseberry and Waterloo.

This would result in the loss of some 34 per cent of its population, 38 per 
cent of its rates income, and 84 per cent of its assets.

The Council has claimed, not unreasonably, that the provision of services 
at their current level to the remaining ratepayers would become impossible. 
In these circumstances the Council itself could well prove not to be 
viable, in which case the only option would be for the South Sydney LGA and 
its administrative organisation to be "blended" with one or more of its 

Leichhardt and Woollahra councils would also suffer through the 
considerable loss of rate-paying areas. These include the inner city areas 
of Glebe and Forest Lodge, both of which have traditionally been home for 
large numbers of students, artists and the working poor.

However, in recent years there has been an overwhelming demand for inner-
city living by the rich, and suburbs such as Glebe and Forest Lodge have 
been targeted as plum sites for rehabilitation and redevelopment.

The proposal follows an earlier one for the "super-merger" of councils 
earlier this year, which would have resulted in only five councils in the 
Sydney inner city area. Opposition to that proposal was so dramatic that 
the State Government was forced to drop it.

The State Government last week claimed that the current merger proposal 
represents the "minimalist option", i.e. the second-best alternative to the 
"super merger" proposal as advocated by its architect, Professor Sproats.

However, the good professor has now denied this, pointing out that he 
provided no detail of how the "minimalist option" would be implemented or 

Moreover, the merger proposal is undoubtedly motivated by a wish to 
downsize local government services and staff numbers. If the merger were to 
go ahead, there is no doubt that services already provided in the areas to 
be taken over by Sydney City Council would be cut, on the grounds that they 
were now partly redundant.

Some indication of this is provided by the current industrial dispute 
within the Sydney City Council itself, whose employees are battling moves 
to contract out the provision of council services.

According to the Federated Municipal and Shire Employees Association, this 
practice has resulted in a reduction of some 23 per cent (i.e. from 945 to 
731 employees) over the last five years.

The mayor of Sydney City Council, Frank Sartor, has contemptuously 
dismissed the opposition to the merger proposals as stemming from "old 
ideology". In an odd way he's right. After all, the ideology will always be 
the same as long as those who produce the goods and services that society 
needs do not also own the means of producing them. 

One way in which that unequal relationship is expressed in big cities is in 
the extreme disparity in the funds available for local government services 
in one area compared to another. And there's no doubt that it's the big 
money that's driving the current proposal for re-division of inner Sydney's 
local government areas.

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