Prior to his presentation to the NSW upper house inquiry on local government, LGNSW president Keith Rhoades blamed higher rates across Queensland and Victoria compared to NSW on council amalgamations, despite NSW being the only state to limit rate increases through rate pegging.

Rates in Queensland have grown by 27.4 per cent since 2008, compared to 13.4 per cent in NSW, while Victorian council rates averaged $692 per capita in 2012-13 compared to $499 in NSW.

“The argument that bigger is always better lacks evidence, and is in fact contradicted by a larger body of research and real life experience that challenges that proposition,” he said.

However, Cr Rhodes said NSW amalgamations in the Clarence Valley and Tamworth failed to yield rate cuts and anticipated more councils would have to apply for rate rises beyond the limit if the state government did not put forward money to cover the costs of merging.

Cr Davis, who supports rate pegging, said merged NSW councils might face difficulties if the smaller merger partners then demanded services at the level provided by the best performing partner.

“You’ll gain better efficiencies, but the problem is the standard of what the people have before they go into amalgamation has to be documented because if you increase the service standard by the money you save, you lose the efficiencies,” he said.

“I don’t believe the public can pay any more.”

The council’s submission to the inquiry estimated Orange and Cabonne’s asset management varied “considerably”. 

The inquiry will hold hearings in Wagga Wagga, Cobar and Armidale before reporting back to the government by August.

The Independent Pricing and Regulatory Tribunal will pass on its Fit for the Future recommendations to the government in October.

danielle.cetinski@fairfaxmedia.com.au