Geoffrey West at TED: The surprising math of cities

The issue of local government amalgamation is back on the table following a call by the Chair of the Bank of Melbourne, Elizabeth Proust, to slash the number of councils in Melbourne from 31 to one.

This isn’t an issue that’s specific to Melbourne. Metropolitan Sydney is administered by an astonishing 38 councils with a further five involved in managing urban overspill, while Adelaide has 19. The real standout though is metropolitan Perth which, although it has less than half Sydney’s population, requires an astounding 30 councils in order to operate.

In contrast, South East Qld (SEQ) seems grossly under-administered. SEQ has a population of 3.3 million and stretches from the Gold Coast to the Sunshine Coast – yet somehow it manages with just 10 councils.

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One of those ten councils is the City of Brisbane, the model of local government that most advocates of amalgamation want to emulate elsewhere. It was created in 1925 by the union of 20 councils and manages an area of 1,367 sq km – roughly an 18-20 km radius around the city centre – with 1.1 million residents.

While the Lord Mayor of Sydney is firmly under the rod of the State Government over issues like bike paths, the City of Brisbane builds and operates key transport, water and sewerage infrastructure. For example, Brisbane Transport operates over a thousand buses and constructed one of the world’s leading Bus Rapid Transit systems.

Things were far worse in Victoria prior to major reforms implemented in the 1990s under the Kennett Government (when Elizabeth Proust was head of the Premier’s Department). The number of councils in the State was reduced from 210 to the current figure of 79 and the number in metropolitan Melbourne was almost halved.

The issue of amalgamation essentially comes down to the age-old tension between economies of scale on the one hand and the extent of local influence on the other.

The benefits of bigger councils are numerous. Depending on the size of the new amalgamated units, there’d be the usual savings that come with size, like potential economies in management costs and efficiencies in the delivery of basic services such as garbage collection and planning approvals. There should be fewer border problems and vastly better coordination of policies and operations across many more suburbs.

Those efficiency benefits alone are enough to justify large-scale amalgamation. However there should be significant additional benefits from the relatively greater weighting likely to be given to regional and/or metropolitan objectives – such as suburban densification – over localised concerns like opposition to redevelopment within specific neighbourhoods and streets.

A large council might also have the credibility and resources to formulate and apply significant policy initiatives; to finance and construct major infrastructure; and operate large business units in its own right. It could make significant decisions optimised for its regional context rather than the whole-of-State perspective, with its attendant compromises, taken by State Governments.

A large council would be more likely to focus on the big picture. The City of Brisbane has the wherewithal to invest in the sort of transport and water infrastructure it decides is in the best interests of residents. Of course this doesn’t mean it would necessarily make the right decisions – Brisbane’s elaborate riverside freeway system was largely built at the behest of council.

The downsides of joining councils up mostly relate to the real or perceived loss of political influence by residents and the potential for local issues to be ignored. The City of Brisbane has 26 Councillors (around one per 43,000 residents) whereas the City of Melbourne has ten (one per 9,300 residents) and the City of Sydney has ten (one per 18,000 residents).

Amalgamation is also a difficult issue for State politicians. Many don’t like local government anyway, but a State Government isn’t going to want to set up a series of large organisations that much of the time will be in public conflict with it over resources and policy. They’re even less likely to want to hand over responsibility for key government undertakings like transport.

So merging councils is always going to be an extremely difficult objective. The Holy Grail for most supporters of amalgamation is something like Brisbane – a single council covering those inner and middle ring suburbs that were constructed up to the 60s and 70s. In my view that’s far from ideal – a fully metropolitan council that manages all aspects of a city’s growth and operations seems eminently more sensible.

In fact that was the basis on which the City of Brisbane was established. In 1925 the boundary for the newly created authority extended well beyond the then urbanised area. Indeed, Brisbane didn’t start to breach its boundary on a serious scale until the 1960s/70s. It was intended to be a metropolitan council but the boundary didn’t keep up with its outward growth.

A metropolitan council should be responsible for the key infrastructure supporting the wider urban area. In principle that should include metropolitan roads and public transport (the City of Brisbane is only responsible for buses, not urban rail) because they can usually be “separated” from non-urban operations. In most cities, urban water, sewerage and drainage can also be easily identified and separated too.

There’ll be limits in some situations – perhaps there’re existing cross-subsidies between urban and country users that’re hard to disentangle – but the general idea is a metropolitan-wide council should be able to get on and do the things that make a city work.

Any discussion of amalgamations will sooner or later draw attention to the unfortunate historical legacy of State governments. As has been proposed since at least the Whitlam era, a better solution would be to create a two tier system with a Federal Government and large regional governments the size of SEQ.

But in the real world change hastens slowly. Simply reducing the number of councils in our major cities would be a big step forward. In Melbourne, amalgamating the City of Melbourne with the Cities of Yarra, Port Phillip and Stonnington (or at least the Prahran part) to create a greater inner city council 5 km around the CBD would be a logical, if modest, step because there’s a clear community of interest.

That would probably be way too threatening to our political process, so outer suburban amalgamations might be a more attractive option in the first instance. Say something like Werribee, Melton and Hume municipalities merged to form the City of MeWeHu?


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Peter Fray
Peter Fray
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