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The financial failings of Central Coast Council are well and truly on the agenda of the NSW Legislative Assembly this week but will the debate be factual and useful?
By Jackie Pearson
The NSW Legislative Assembly’s business paper for Tuesday, 4 May includes a Notice of Motion from Mr Adam Crouch MP, Parliamentary Secretary for the Central Coast, Member for Terrigal and Government Whip. Then on Thursday, 6 May, an e-petition calling for a judicial inquiry into the council’s collapse is due to be debated.
Mr Crouch, via his Notice of Motion, will move that the NSW lower house: “(1) Condemns Central Coast Council for racking up an unprecedented $565 million of debt. (2) Condemns Central Coast Council for proposing a 15 percent rate rise. (3) Notes poor decision-making and significant failures by a group of councillors and council senior staff led to this terrible outcome. (4) Notes the Administrator’s 30-Day Report makes clear that amalgamation is not the cause of this financial situation and that Central Coast Council had a surplus budget in its first year after its amalgamation.”
On Thursday, 6 May, an e-petition signed by over 22,000 Central Coast residents will be debated in the Legislative Assembly. The e-petition, tabled by Shadow Minister for the Central Coast and Member for Wyong, Mr David Harris MP, called for “a judicial inquiry into the financial mismanagement of Central Coast Council and the Minister for Local Government delay any application by the Council to IPART for a Special Rate Variation and any decision on the sale of Council Assets until residents can consider the findings of the judicial inquiry and its recommendations.”
Local Government Minister, Ms Shelley Hancock, has subsequently ruled out a judicial inquiry on the grounds that it is not an option available to her under the Local Government Act 1993. On 26 she announced a public inquiry into Central Coast Council to be overseen by Ms Rosslyn McCulloch as commissioner.
The NSW Office of Local Government has now set up a web page for the Central Coast Council public inquiry but there’s no email address or information about hearing dates or how to register to be a witness or make a submission so the timing is unclear. The Point has asked the NSW Office of Local Government and Minister’s office for more information given the level of public interest in the governance and management of Central Coast Council.
While we wait for the McCulloch public inquiry to get underway, what can we expect from the two items before the NSW lower house this week?
Mr Crouch’s notice of motion
This is a general business motion, which any MP can put forward for debate. It calls upon the Legislative Assembly to do something or expresses a certain view on a matter. As the mover of the motion, Mr Crouch will be given seven minutes to speak. Another MP will then also receive seven minutes to speak on the motion. Four members are then given four minutes each to debate the motion and Mr Crouch receives a final four minutes to respond. Then the House votes on the motion.
Most debates are won by the government of the day, which has the majority. However, the Berejiklian Government’s majority in the lower house is slim so the outcome is not always a sure thing.
Is the Crouch motion a matter of political point-scoring or will it serve to inform the community of how the sorry mess of Central Coast Council really came to be? Let’s have a look at it point by point.
Condemn Central Coast Council for racking up an unprecedented $565 million of debt
Yes, that is a big load of debt but 60 per cent of it existed at the time Central Coast Council was created. The debt “racked up” by Central Coast Council between May 2016 and October 2020 was around $200 million, most of which was the restricted funds illegally spent without Councillor knowledge.
The more than $300 million debt carried through to Central Coast Council from Gosford and Wyong Councils never rated a mention until 2020. Unless Mr Crouch has new information about the actions of the elected Councillors this part of the motion needs to be rephrased to “Condemn Central Coast Council staff”. Nothing new to see here.
Condemns Central Coast Council for proposing a 15 percent rate rise
Surely this is the government shooting itself in the foot. Interim Administrator, Mr Dick Persson AM, has made his thoughts very clear in regard to Mr Crouch’s criticism of the proposed 13% Special Rate Variation on top of IPART’s 2% rate peg.
“I’m responsible for 13% rate increase,” Mr Persson said at the 3 March Council meeting. “There was always going to be the 2% and had … none of this happened there was going to be a 27% rate increase in Gosford…
“There’s a number of other things I am finding pretty offensive and I am going to be teeing off here so. Mr Crouch. Member for Terrigal. Member of the Government who is responsible for the mergers.
“On his facebook page last week he says, ‘The Local Government Minister and I do not support the proposed rate rise’. Well I’ve met the Local Government Minister and that isn’t being conveyed to me. ‘As a ratepayer myself I am furious that our community might be forced to pay for the mistakes and failures of a group of Councillors and Council senior staff’…
“Mr Crouch’s government was going to deliver a 27% increase in the rates of the residents of Gosford. And I resent the fact that he is hiding behind the 13% rate increase… to imply ‘nothing here. Don’t look at me. I’m against all this’. I wonder what he would have said to defend the 27% rate increase which, by the way, is directly as a result of the merger as is the 20% rate decrease in Wyong.”
Notes poor decision-making and significant failures by a group of Councillors and Council senior staff led to this terrible outcome
Has this claim been borne out by the facts? It’s an imputation that continues to be repeated in public but the public is not aware of the information that has been provided to Mr Persson, Mr Ryan and Mr Hart over the course of the past six months by staff. We, the people, have no idea of the extent of their investigations and interrogations of how restricted funds were spent without Councillor knowledge or consent. We are told there was no corruption so what happened?
Mr Persson released some email exchanges between the former CEO and CFO which he claimed as incontrovertible evidence of knowledge that restricted funds were being unlawfully spent. When asked after a Council meeting by two suspended Councillors if he was willing to give the public access to the information he’d been provided by staff as the basis for his reports Mr Persson said he would. That has not eventuated apart from the emails released in March which appeared inconclusive.
What was the depth of the investigations made into how Central Coast water funds which were restricted turned up in the consolidated financial reports as unrestricted? Was this a legacy from the Wyong or Gosford Councils? It appears a consultant employed for a short period last year claimed the practice commenced in the Wyong Council.
That would fit with the NSW Audit Office’s 2020 revelations about the use of restricted funds dating back to at least pre-merger.
Mr Persson’s final report completely underplays the significance of the spending of restricted funds but it has to be at the core of what went wrong as it underpinned the whole budgeting process. Hopefully the public inquiry that has been ordered by the Local Government Minister will clear this issue up. If it does not, calls for a judicial inquiry should continue. The Central Coast community must have assurances from the government that created its mega council that these financial problems cannot resurface down the track. Cracks must be exposed, cleaned out and fixed or a demerger put on the table.
Notes the Administrator’s 30-Day Report makes clear that amalgamation is not the cause of this financial situation and that Central Coast Council had a surplus budget in its first year after its amalgamation.
Don’t be fooled by the politics behind this statement. It simply is not true. All councils forced to amalgamate in 2016 have experienced financial difficulties. The only one that claims to be doing well is Northern Beaches which locals describe as a bureaucratic nightmare to deal with.
Put simply, how can two councils deemed unfit for the future suddenly be merged into a mega beast that is instantly a model of financial sustainability. Only a full judicial inquiry will have the powers and the independence from the NSW Government to examine the success or failure of the 2016 amalgamation process.
The e-petition debate
COVID-19 means the public gallery at NSW Parliament House is closed so there is no opportunity for members of the Central Coast community, including any of the 22,000 who put their names to the e-petition to watch the debate.
Expect it to be another opportunity for the Government to blame the Labor and progressive independent councillors for the whole Central Coast Council debacle.
Expect the Labor opposition to condemn the Government for its failed merger and its broken local government funding model. It’s a dead rubber because the Minister for Local Government has already stated she is unable to call for a judicial inquiry.
That may be the case but, if willing, the Premier could call for a judicial inquiry.
What can you do?
In terms of this week’s parliamentary debates, members of the Central Coast community can do very little except listen and hope that their best interests are served.
Between now and the next Central Coast Council election, expected to be held in late 2022, there is plenty that community members can do to exercise the democratic rights they have left. Here are some suggestions:
· Write to your State MP and tell them you support a judicial inquiry. Send a copy of your letter to the Minister for Local Government and the Shadow Minister for Local Government.
· Call the Minister for Local Government or email her and ask for more information about how you can contribute to the public inquiry to be chaired by Rosslyn McCulloch.
· Write a submission or ask to provide evidence to that inquiry.
· Stay engaged with items listed on the Council agenda, register to speak at an open forum so the Administrator knows you care about Council matters.
· Visit the yourvoiceourcoast website and get involved in the consultation process.
· Write to [email protected]– Mr Persson and then Mr Hart will be your stand-in Council for at least the next 16 months. Make sure they are aware of your views about local issues.
