No benefits apparent
I have looked at Kogarah City Council's the "Future of the City of Kogarah" (April 2015) document. This is in respect of the state government's push for councils to amalgamate.
I am confused greatly by Kogarah's analysis of the financial information if they amalgamate.
My long-term understanding is that because of economies of scale, significant financial savings normally happen when organisations amalgamate.
However, when Kogarah (for example) joins Hurstville and Rockdale no financial savings seems to happen.
The number of employees does not reduce, the numbers stay the same.
The operating expenses of the joined councils have gone up by $10 million, and so have not provided the 20-30 per cent savings you would expect.
Further, the residential rates go up 25 per cent.
Their financial analysis goes against every principle I know about the economic benefits of economies of scale.
David Chambers, Carlton
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