The Hon. SHAOQUETT MOSELMANE [5.46 p.m.]: In April 2010 the Local Government and Shires Associations of New South Wales put together a discussion paper titled "Modernising Local Government". The key question in the paper is what reforms would assist New South Wales local government remain or become financially viable. This is an important question to which not only an ever-increasing number of people in local government but also many citizens will want an answer. So what are the problems? According to the Local Government and Shires Associations it is now clearly established that New South Wales councils are burdened with a huge infrastructure renewal backlog; struggling with a narrow and constrained revenue base, and that a large proportion is financially unviable or vulnerable in the long run under current policy settings and fiscal arrangements.

For local government to survive, the association argues that rate pegging must end; that significantly better Australian Government funding must be provided; that there must be mutually agreed charging regimes for co-regulatory roles; that greater use must be made of debt financing for the long term; and that there be better financial and asset management. If local government is to survive and fulfil its growing obligations and responsibilities to residents and rate payers, all options, including amalgamations, must be clearly laid on the table. The Sydney Business Chamber is one such supporter and has called for changes to local government in the greater Sydney area. One of its key recommendations is council amalgamations.

I understand that the issue of amalgamation has been the subject of an inquiry and a report by General Purpose Standing Committee No. 5. I note with interest that during debate on the report a number of members described amalgamation as a "vexing issue". I do not believe that it necessarily is, and I do not believe we should shy away from it. I do not believe that amalgamation is the monster that people make it out to be. Amalgamation does not mean the crushing of councils; it does not mean disregarding the affection many communities have for their local municipalities; it does not mean big government; and it does not mean disloyalty or lack of commitment and respect to the role, autonomy and value of local government. It does not mean running roughshod over local democracy. It does however mean, amongst other things, addressing the falling revenue base and the weakening capacity of local authorities to bring deteriorating infrastructure back into working order.

I note that when discussing amalgamation one cannot, for instance, suggest or place inner Sydney council in the same category as regional or rural councils. Each has its own distinct issues and solutions, and issues will vary from one council to another. At all stages the public must be consulted and involved in the process so that a public debate can be held and an acceptable and workable solution found. Regional alliances, joint tenders and resource sharing have been effective tools to minimise costs and find solutions to some of the problems faced by local authorities, but in my view all such measures, great as they are, only help to delay the inevitable. Support for amalgamations is there from a number of quarters, but someone has to lead. In Victoria Jeff Kennett did and it worked. This is not a blanket endorsement of Mr Kennett's approach but, rather, an acknowledgement of the need for action. I note that Australian Local Government Association President Councillor Geoff Lake, who participated in 2009 panel discussion at the ninety-seventh Local Government Association of Tasmania Annual Conference, said amongst other things:

My main point of reference is the Victorian experience during the Kennett years in the mid-1990s when Victorian local government went from having more than 200 councils to a then 78 … You can't find anyone involved in Victorian local government these days who would disagree that local government is much improved these days based upon current boundaries than it was on pre- Kennett boundaries.

Finally, I note that even the Leader of the Opposition, Barry O'Farrell, has raised the spectre of the possibility of amalgamations, even if voluntary. According to a Daily Telegraph article by Josephine Tovey on the 26 October 2010 Mr O'Farrell pledged during the recent Albury Local Government Association conference that he would "provide incentives to support voluntary council amalgamations". So, to be genuinely fair dinkum about improving local government, all options, including amalgamations, must be placed fairly and squarely on the table. We must come to terms with reality and make the necessary decisions to better the future of our generation and that of future generations.