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First review of savings forecast for amalgamation

Heavy borrowing on the agenda

Council Watch with Peter Marshall* 

Spruikers of the forced amalgamation of Palerang and Queanbeyan councils have been highlighting the savings achieved by the merger. Except there haven’t been any. Nor will there be.

A report on the first year of operations, tabled at the council meeting of 23 August compared the projected savings over 10 years as calculated by the KMPG report for the NSW Government, with council staff’s own projected savings.

It should be noted that the KPMG report remains secret, as does the methodology they used. KPMG estimated savings of $17m over 10 years. Council staff project savings of $13m over 10 years.

In a budget of around $170m, this represents a saving of around 1%. Any number of factors could result in this saving not being achieved, but let’s accept it at face value.

The trouble is, the NSW Government granted QPRC $5m to assist with the costs of the merger. In addition, the government granted QPRC $10m in untied funds to sweeten the merger.

Rather than spend those funds replacing aging infrastructure, such as worn out roads or crumbling bridges, which could have had a good effect on council’s bottom line, the Administrator has allocated most of it to new stuff. New stuff has to be depreciated and maintained, and the effect on council’s bottom line is unknown.

Perceptive readers also will have noticed that the $15m given to QPRC by the NSW Government exceeds the $13m projected savings. So there is projected to be a net cost to the NSW taxpayer of $2m. Over 10 years, in a budget this size, that’s a trivial amount, but gives the lie to the claim of savings.

During the period of Administration, the council also seems to have committed to extensive borrowings, for the Ellerton Drive Extension, an extension to the indoor sports centre, to buy land for a cemetery, and for the new council headquarters. How committed council is to each of these and other major projects remains unclear, as the administration has been reluctant to say.

As well as borrowing, the Administrator also seems to have committed council to selling large amounts of council land in Queanbeyan CBD. Details of this and other projects remain vague, subject to claims of being “commercial in confidence”. No doubt they are, but in the absence of elected councillors scrutinising them for value for money and probity, the voting public would be right to be suspicious.

*Peter Marshall is a former Palerang councillor (and therefore knows about looking at council finances). He is a Greens candidate for QPRC council.

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