The following are some common myths about amalgamation and their refutations:
| Myth | Amalgamation saves money. With fewer councillors and mayors our rates will go down, or at least not go up as much or as quickly. |
| Reality | This has been thoroughly disproven. The amalgamations done in other states and overseas have been well studied. Unequivocally, the conclusion is, “far from delivering services more cheaply, bigger local government typically provides more expensive services.”
More about this. |
| Myth | Bigger councils benefit from ‘economies of scale’. They can purchase larger-volume goods and services at steep discounts. |
| Reality | Local shires can and do cooperate across boundaries through the LGMA and LGAQ to benefit from “economies of scale”, where those are possible. Most functions of local government, however, do not benefit from economies of scale. That’s why those functions reside in local government.
More about this. |
| Myth | It’s not the super-council’s new councillors who determine development, it's the town plan. Noosa has a great town plan. |
| Reality | Noosa had a town plan. Noosa’s town plan ceases to exist when Noosa ceases to exist. It gets replaced by whatever planning scheme the “super council” comes up with.
More about this. |
| Myth | Bigger councils are stronger councils. |
| Reality | Bigger is often neither better nor stronger. The Coles–Meyer merger nearly brought down both organisations. The only solution was to split again. This is a very common mistake that brings only great expense and pain.
More about this. |
The following sections provide additional background for the points made above.
The quotation cited above is from a well-established body of research on prior amalgamations in other states and overseas. Such research has conclusively established that amalgamations produce increased expenses and poorer service delivery. One of the many books about this is Reshaping Australian Local Government: Finance, Governance and Reform by Brian Dollery, Neil Marshall and Andrew Worthington (eds), UNSW PRESS, Sydney, July 2003, 288pp
Wendell Cox of Demographia (www.demographia.com), an internationally known public policy firm, reports the following on local council amalgamations he has studied the United States and Canada:
“The only ‘economies of scale’ in larger governments are for special interest groups, which are able to exert control over larger government organisations with less effort and expenditure.”He goes on to cite how amalgamation of six local councils into a Toronto ‘super council’ dramatically increased costs, reduced efficiency, and is now producing a $600 million deficit. In summation, he states:
“The move to ‘super councils’ is based on the false premise that we actually know how to plan large systems and that the bigger the entity the better the planning. If this were so, the Soviet Union would have been a raging success. All human experience shows the opposite is true.”
The councillors and mayors that are eliminated through amalgamation are simply replaced with far larger council staffs and layers of state government bureaucracy. Councillors with double or triple the number of constituents expect larger paychecks, more staff, bigger offices for those staff, and more office equipment.
Finally, even if this myth were true, government does not exist to force “efficiency” on us for its own sake, especially at the expense of democratic representation. Private industry can be quite efficient, but it is most emphatically not democratic.
Like the previous point, this aspect of local government has been very well studied. The specific services of local government that benefit from larger sizes and those that benefit from smaller sizes have been analysed and catalogued. Check online, at your local library, or do a literature search at university for the wealth of information on this topic.
One of the first tasks of a ‘super council’ of the Sunshine Coast will be to come up with a new planning scheme. Noosa will have, at best, a one-sixth vote in that. To see what the other five-sixths will be, just look at the development philosophies enacted in Maroochy and Caloundra.
Yes, the local government minister at the time, Andrew Fraser (now Warren Pitt), has talked about preserving “some aspects” of Noosa’s planning scheme, “until they expire”. But under the state’s amalgamation laws, councils can ignore these retained planning schemes if there are “sufficient grounds” to do so. Those grounds are not defined...
Furthermore, we have learned not to trust much that Andrew Fraser says. At a meeting with Noosa residents on 10 July, he said that if all councils were as well-run as Noosa, no amalgamations would be necessary and that he would not support plainly unfounded amalgamations. He then rubber-stamped the LGRC’s recommendation to amalgamate Noosa.
For more information, see http://qld.greens.org.au/media-releases/greens-fight-noosas-noose.
The challenges of effectively managing large organisations that span formerly different cultural, functional, demographic, or economic realms frequently defeat even the very best management teams. The Coles–Meyer fiasco mirrors that of the Daimler–Chrysler merger, Viacom–CBS, Hewlett-Packard–Compaq, Glaxo–SmithKline, and many, many others. A number of the councils merged in Victoria in the 1990’s fared similarly and had to be de-amalgamated.
The best estimates are that three-quarters or more of mergers fail. If those multi-nationals’ management teams can’t get it right, what chance do merged councils have? Let’s learn from the mistakes of others rather than repeating them.