McGirr raises concerns over government's new demerger bill

On Tuesday, local government minister Ron Hoenig introduced a de-amalgamation bill to create a legal pathway for councils wishing to demerge.

The amendment appeals section 218CC of the Local Government Act, which includes a provision requiring the state government to provide the funds needed for councils wishing to split.

Under the changes, councils wishing to de-amalgamate are being required to develop a robust business case upfront.

This case must consider the financial impacts and council's ability to fund de-amalgamation, long-term strategic plans and the service capacity of the de-merged councils.

Mr Hoenig said the forced council amalgamations were a "failed and expensive experiment", but argued despite the state government's belief councils deserve to split if they so desire, there needs to be a "realistic" approach.

"It's why one of my main priorities as local government minister has been to find a way to remove the roadblocks posed by the existing demerger process, and give communities the opportunity to decide," he said.

"These amendments the government has introduced provide a clear path forward for councils wishing to de-amalgamate, providing much more clarity for current and future proposals.

"However, it's essential that local democracy is enshrined in the decision-making process so that councils and communities are fully informed of the financial and other implications of de-amalgamation."

But Dr McGirr was less than satisfied, saying the bill does not support councils enough.

"I'm disappointed, because it does not require the government to provide financial and other support for the demerger," he said.

Dr McGirr said the state government is "basically asking the council[s] to do the work and fund it. It was a decision by the previous state government."

"It's just not fair that the state government is expecting the local community to fix a problem that they didn't cause and that they have had to wear," he said.

Dr McGirr said while the bill "doesn't rule out government support or assistance," he was disappointed that it does not require that support be given to councils.

Border-based Greens MLC Amanda Cohn introduced the Deamalgamation Plebiscites Bill, which aims to amend the Local Government Act to allow plebiscites to be held to vote on demerging amalgamated LGAs, last November.

However Dr McGirr said the minister's bill is significant in that only government bills can make financial commitments.

"An opposition's private member's bill can't appropriate funds, so that's why what the government has introduced is so important," he said.

Despite his concerns, Dr McGirr remains hopeful.

"I have been working with the government and Dr Cohn, and will continue to work with... all relevant parties to get a solution to this," he said.

"At the end of the day, councils do need that support for this to be a reality."

To date, Cootamundra-Gundagai Regional Council remains the only merged council in the state to be given the green light to demerge by the state government.

It's now been nearly 18 months after the former coalition government approved the demerger and mayor Charlie Sheahan is relieved to see the government finally taking action in this space.

"It's a positive step by the minister, but they should have created a legal pathway for the demerger process to happen 12 months ago," Cr Sheahan said.

He believes amendments are needed to proceed with the demerger process, but said that has been known for some time now.

In 2016, under the watch of the Baird Government, all Cootamundra and Gundagai councillors were sacked, and Cr Sheahan said it was a "huge injustice".

"Our communities woke up one morning and our councillors were all dismissed and our council didn't exist," he said.

Despite the state government's bill aiming to remove a key provision that requires the government to fund council demergers, Cr Sheahan remains optimistic this will not affect the CGRC as its demerger has already been approved.

He said while the final dollar figure remains unknown, the council is "keeping tabs" on all associated costs for the demerger with the aim of presenting it to the government at a future date.

But Cr Sheahan expressed clear opposition to the idea that other councils were being asked to foot the bill to demerge.

"I think the government should be looking at some way of assisting them to fund it, whether that be low interest loans or something they can work into a long-term financial plan," he said.

"But to just sit back and say, if you want to demerge, you're going to have to pay for it yourself... these councils are already under financial stress as it is. How much more do you want to bleed your ratepayers?"

Snowy Valleys Council is also on the path to demerge, currently awaiting for a decision by the Local Government Boundaries Commission after they submitted their business case late last year.

Mayor Ian Chaffey is also hopeful it will not have to abide by the proposed changes, which he says are pushing yet more costs onto ratepayers.

"This idea that you can keep on taxing people because of what is essentially a flawed process - it was a disaster from day one," Cr Chaffey said.

He said "everyone is suffering from what is a flawed process, forced upon local government by a government that thought it was a wonderful idea."

It comes as member for Cootamundra Steph Cooke welcomed the introduction of the state government's bill, however she promised to scrutinise it with a "fine-tooth comb".

"I have requested an urgent briefing with the local government minister to clarify what this bill means for the Cootamundra and Gundagai communities," Ms Cooke said.

"My biggest concern continues to be around the cost of the demerger, along with achieving a timely resolution for the sake of those impacted by the ongoing uncertainty surrounding the demerger process."