Residents ? Or Shareholders ?

When Mike Baird decided to quit politics perhaps the most important issue he left unresolved was the council amalgamation issue.   This has been festering for years and clearly the majority of people have at least reservations about forcing neighbouring councils to pool their resources in the name of efficiency.

The reasons are many and varied.  Topping the list is the fear that the resulting super council will be a vast bureaucracy with impenetrable decision making far removed from where they live.  In particular, those councils that include older, settled suburbs think that their rate money may be diverted to the gentrification of lesser suburbs that have become part of the new council mix and their services may suffer.

There is almost a tribal identity linking many older residents with the name of their suburb and the council that administers it.   The people elected to council are personally known to them and council jobs are wide spread in the local community.   They have input that will be lost if the council administration is widened.

The reason for council amalgamations seem to have fallen on deaf ears.  The backlog of work deferred because of lack of funds is reaching critical proportions in many administrations and some of these councils are struggling to even take care of the basics that fall under their control.  It is a case of ever rising rates accompanied by the cost of services slipping further from control.  Where debt is accumulating, the prospect of bankruptcies loom.

A council is just like any other commercial business.  It is obliged by law to pay its bills and if it slips into serious arrears its creditors take steps to wind it up.  It is the legal position and how ratepayer residents fit into the picture that needs urgent thought as this amalgamation is resolved.

New premier Gladys Berejiklian is anxious to bring this amalgamation matter to a head and at present some councils have merged while others are vigorously fighting through the courts to retain their autonomy.   Options being considered are to cease forced amalgamations and take the matter back to residents by way of a plebiscite.  On the present mood of voters, it would be likely that such a poll would bring in a negative result.

What is not clear is the precise position ratepayers of a bankruptcy by their council would find themselves in relation to the debt owing.  It could  be construed that as the voting force that elected the council to office they are its shareholders - and cumulatively responsible for the debt.

That could involve a levy on each individual household, and that is something that should be made abundantly clear before any vote is held on forcing councils to achieve efficiency by amalgamating to spread the load.

There seems a vague feeling that councils are somehow exempt from normal bankruptcy practice, and that in such an event the government would be forced to bail them out anyway - but that is not necessarily correct.

It is a matter of some importance that if this goes to a vote, the ratepayers know precisely they are letting themselves in for financially.