Hired Guns: Local Government Mergers in New South Wales and the KPMG Modelling Report

© 2017 CPA Australia Across the developed world, including Australia, public policymaking now rests heavily on commissioned reports generated by for-profit consultants, contrasting starkly with the earlier customary reliance on the civil service to provide informed policy advice to political decision makers. Dependence on commercial consultants is problematic, especially given the moral hazards involved in ‘hired guns’ providing support for policy ‘solutions’ desired by their political paymasters. This paper provides a vivid illustration of some of the dangers flowing from the use of consultants by examining the methodology employed by KPMG in its empirical analysis of the pecuniary consequences of proposed municipal mergers as part of the New South Wales’ (NSW) Government's Fit for the Future local government reform program. We show that the KPMG (2016) modelling methodology is awash with errors which render its conclusions on the financial viability of the NSW merger proposals fatally flawed

Learning from Experience in NSW?

While the bulk of the empirical evidence shows that municipal mergers do not improve the performance of local authorities, Australian policy-makers nonetheless continue to impose council amalgamation, as illustrated by the current New South Wales 'Fit for the Future' local government reform process. This paper first critically examines the empirical evidence employed by the Independent Local Government Review Panel on the impact of the 2004 council mergers. We argue that this evidence is flawed. We then provide an empirical assessment of the municipal mergers, which occurred over 2000-2004 with our sample drawn from Group 4 councils in the New South Wales variant of the Australian Local Government Classification System. Group 4 councils represent a group of significant regional cities and town councils with similar operational activities. We demonstrate that merged councils have not performed any better than their unmerged peers over the period 2004 to 2014. The paper concludes with some brief policy implications for local government reform in New South Wales and elsewhere

Policy-Based Evidence Making in Local Government: The New South Wales’ Municipal Merger Program, 2011 to 2017

Contemporary public policy-making relies heavily on commercial consultants for specialised advice. In this paper, we examine the problematic nature of this phenomenon by considering the controversial forced amalgamation programme in New South Wales (NSW) local government over the period 2011 to 2017. By way of a critical examination of two key consultant reports underlying the NSW municipal mergers, we show that the failure of this programme to achieve its intended aims is due in large measure to the nature of the externalised advice on which it was based and the manner in which that advice was solicited from commercial consultants