NSW government won't promise $15m rescue package as Dungog Council leans toward merger

NO PROMISES: Deputy Premier John Barilaro, left, has told Dungog Council he will fight for them to have access to a $15 million merger fund should they join with Port Stephens.
NO PROMISES: Deputy Premier John Barilaro, left, has told Dungog Council he will fight for them to have access to a $15 million merger fund should they join with Port Stephens.

THE future of Dungog Council rests on an each way bet that the NSW government will come good with a $15 million rescue package should councillors agree to a merger with Port Stephens on Tuesday.

A fortnight after voting 5-4 not to pursue the merger with their coastal neighbours, councillors will again be asked to decide on the shire’s future thanks to a rescission motion.

But the outcome could easily be different this time following the unexpected resignation of deputy mayor Tony McKenzie after a prolonged illness.

A councillor since 2008, Mr McKenzie handed his resignation to general manager Craig Deasy after the meeting on May 1.

The change in numbers will mean that if councillors vote along the same lines again the outcome of the vote will be 4-4, the deadlock giving mayor Harold Johnston the deciding vote.

Cr Johnston shocked the gallery on May 1 when voted in favour of the merger despite previously opposing the idea. 

Whatever the outcome, councillors will head into the vote with no guarantee the state government will come good with the $15 million Dungog would have received had it been forcibly merged.

While Port Stephens Mayor Bruce MacKenzie is confident the money will be forthcoming, a letter sent from Deputy Premier John Barilaro to Mr Deasey makes no such promises.

Instead, Mr Barilaro said that while he would “strongly advocate within Cabinet for this funding to be provided to the new council” it would “need to be considered”.

“I am aware of the infrastructure backlog in Dungog Shire and the challenges faced by council in managing this backlog,” Mr Barilaro wrote in the letter, seen by the Newcastle Herald.

“While the Government cannot presently commit additional funding to address this issue with relation to a potential merger proposal, it remains committed to working with any council serving Dungog Shire to improve the capacity of council in delivering infrastructure to residents and ratepayers.”

Muddying the waters further is the answer to a question on notice in state parliament. 

Last month Labor’s shadow minister for local government Peter Primrose asked whether money put forward to entice mergers – the so called “Stronger Communities” fund, which included the $15 million that would have been given to Dungog – would “still be made available to those communities which the government has decided should no longer be forcibly merged”.

That’s prompted Port Stephens MP Kate Washington – who plans to speak at the meeting on Tuesday – to accuse the government of “misleading” Dungog councillors.

The availability of the funding will be crucial to whether the merger stacks up financially for Dungog and Port Stephens.

Prior to the meeting on May 1 Mr Deasey laid out a grim assessment of the council’s prospects should it stand alone, outlining the likely necessity of rates increases “well in excess of what the community could anticipate” if a merger did go ahead in order to address everything from the shire’s ageing infrastructure to the kitchen in the council building, which he described as “a bloody disgrace”.

But even he conceded he didn’t “have an understanding” of whether the government would come good with the money.

“In the scheme of things the $15 million is the crux of this whole thing, and the Port Stephens resolution [to pursue the merger] is framed in such a way that the $15 million certainly needs to be on the table,” he said.

He said it was “the only way [the merger] could eventuate with less pressure on the rates base overall”.

That’s because the predicted 28.95 per cent rate rise for Dungog residents if the merger does go ahead assumes the money will be available. 

If not, ratepayers would likely be looking at something closer to the 13 per cent rise for six years that was put forward as the council’s plan if it did stand alone.


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