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HG Alert: WA Local Government reforms look to change 100 year old boundaries - 30 October 2014

For the first time in 100 years, the State Government is making major reforms to the number of local governments in metropolitan Perth.

In this Alert, Special Counsel Karen Browne, Solicitor Gulshan Price and Law Graduate Andrew Clements, provide an updated overview of the changes and what the reforms mean for both local government, developers and ratepayers.

Background

As a result of significant changes to population density and public infrastructure, over the last five years the State Government has been investigating reforms to the framework of local governments, many of which were established 100 years ago.

In June 2011, the Minister for Local Government commissioned the independent Metropolitan Local Government Review Panel, chaired by Alan Robson AM then Vice Chancellor of The University of Western Australia (Robson Report). The Robson Report determined that local governments in metropolitan Perth faced major challenges over the next 50 years in planning for an increasing and changing population.

The Robson Report found weaknesses with the current metropolitan local government structure, including a significant level of duplication and wasted resources and a fragmented approach to local planning resulting in a system that is unnecessarily complicated, uncoordinated and lacking in strategic focus.

The Robson Report was handed down in 2012 and contained 30 recommendations, including reducing the number of Perth councils from 30 to 12.

The changes

The State Government has accepted all but two of the Local Government Advisory Board’s recommendations. This means that initially local governments will be reduced in number from 30 to 21.

Under the plan, there will be nine boundary adjustments and three amalgamations. The following local governments are to be joined by boundary adjustments:

  1. The Shire of Mundaring joining the City of Swan;

  2. The Town of Bassendean joining the City of Bayswater;

  3. The Shire of Kalamunda joining the City of Belmont;

  4. The Town of Cambridge joining the City of Subiaco;

  5. The northern part of the Shire of Serpentine-Jarrahdale joining the City of Armadale;

  6. The Southern Part of the Shire of Serpentine-Jarrahdale joining the Shire of Murray;

  7. The City of Canning joining the City of Gosnells; and

  8. Small modifications to the Stirling and Melville boundaries.

Six local government authorities will amalgamate to form three new ones:

  • The Town of Victoria Park and the City of South Perth will combine to form the City of South Park (Burswood Peninsula will be within South Park’s boundaries but the State Government will continue to hold planning and development authority over the area);

  • The Town of East Fremantle and the City of Fremantle will combine to form the City of Fremantle; and

  • The cities of Kwinana and Cockburn will combine to form the City of Jervoise Bay.

The State Government has proposed a deadline of 1 July 2015 for implementing these changes to the local government framework.

The State Government rejected two proposals for a western suburbs super council and changes to the City of Perth’s boundaries.

The State Government has subsequently advised that it will look to introduce a City of Perth Act, similar to legislation in other states, such as Victoria. While the details are yet to be released, the Government has stated that this will include the Government’s preference for boundaries changes to include a number of key assets of the state and include special powers to recognise the City of Perth as a capital city. Any legislation will also include the Advisory Board’s recommendation to merge the City of Vincent with the City of Perth.

These reforms remain subject to approval by Parliament and are currently subject to a legal challenge in the WA Supreme Court by Cities of Subiaco and South Perth and the Shire of Serpentine Jarrahdale. The application will be heard in November.

What do the changes mean for Councils?

The Government hopes the amendments will bring about a greater sustainability for local governments. However, an analysis of similar reforms in Queensland and New South Wales did not establish that local government reforms necessarily resulted in cost savings for ratepayers.

The Government estimates the reforms will create savings of more than $20 million in elected member allowances, and at least $30 million in CEO packages over a 10 year period. It also means that each council will represent on average 114,000 people compared with 63,000 prior to reform.

The Australian Centre of Excellence for Local Government reported in 2011 that there is little evidence that will of itself yield economies of scale, rather that due to a greater urbanisation and better metropolitan planning, local government is able to make a strong contribution on behalf of communities and in broader regional interests.

What do the changes mean for developers?

The reforms seek to remove the overall inefficiencies at the local government level where there is a high level of duplication and fragmentation. Business groups will benefit from a more efficient form of government which is better placed to capture development opportunities which may be lost under the current system.

At a practical level for developers this will result in an increased efficiency. Businesses will be required to deal with fewer local governments, reduced town planning schemes and fewer licensing requirements.

What do the changes mean for ratepayers?

Under the reforms residents will have a less localised form of local government. The reforms will enable both state and local governments to better manage WA’s rapid population growth which is intended to result in better synergies in respect to metropolitan planning with local government increasing its capacity to make a strong contribution on behalf of local communities.

As discussed above, it is unlikely that council rates will go down as a result of the reforms. In the budget $15 million in grants and $45 million in loans were set aside for the reforms. However, the WA Local Government Association expects that funding implementation costs are more likely to be in the range of $65 million to $100 million.  Any shortfall in funding implementation may result, at least in the short-term, in increased rates.

For more information regarding property or planning matters, please contact HopgoodGanim’s Commercial Property and Planning and Development teams.

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