Radical changes that would see a ‘fundamental shift’ in power from local councils to the state government have been blasted by NSW’s peak representative body, Local Government NSW (LGNSW).
And despite the reforms being now on hold, the minister responsible for local government, local Ballina MP Don Page, was accused of failing to consult LGNSW at an urgent meeting held on March 15.
Additionally, detail on the Early Intervention Bill is vague and lacks detail, says joint president of LGNSW, Cr Keith Rhoades AFSM.
‘If passed, this legislation will undermine the democratic responsibilities of mayors and councils elected by residents and ratepayers by making councils responsible to the minister,’ he said. ‘The lack of detail and broad scope for the ‘Performance Improvement Order’ criteria is extremely worrying. The NSW government needs to give a clearer definition of what constitutes a ‘non-functioning’ and ‘noneffective’ council.’
Presently, councils can only be dismissed by the NSW governor if a public inquiry has been held and if the minister for local government recommends the dismissal.
There are 152 NSW local government bodies and Mr Page told parliament there were, ‘no less than 10 cases’ that cost millions in recent years.’ [Hansard transcription]
Additionally he says, ‘for the first time in 17 years, there are no councils under administration’.
So why is this such a priority? Mr Page told The Echo, ‘We
have had a small number of councils who have become dysfunctional and if this legislation had been in place the problems would have been sorted out.
‘For example last year a Sydney council had a group of councillors who kept walking out of the chamber so a quorum could not be maintained and matters could not be dealt with. This went on for many months!
‘There is currently no provision in the Local Government Act to deal with such a situation. By being able to nip problems in the bud there will be fewer dismissals in future.’
The power to suspend a whole council already exists in a number of other jurisdictions including Western Australia and Queensland Mr Page told parliament. [Hansard transcription, February 26, 2013]
He also referenced a recently published NSW auditor-general’s report, Monitoring Local Government, which, ‘also supported the need for government to have greater powers in tackling poor performance.’
While the lengthy 26 page amendment to the Local Government Act includes much detail on what powers the state wants, it’s sparse on how councils can appeal. One notable proposal is a ‘consultation period of not less than 21 days,’ for submissions.
And being suspended means a total lockout – there would be no pay or ‘use of council facilities’.
The amendment, available at http://bit.ly/XqZHKZ, would enable the minister for local government or the director general to demand documents
about the council, its operations or its activities; enable the minister to issue ‘performance improvement order’ to enable the minister to suspend a council for a period of up to three months or more,’ provide for the appointment of interim administrators; and to allow other minor and miscellaneous amendments.
As for the Local Government NSW claims of not being consulted, Mr Page told The Echo his department has had three consultations so far, ‘Two as minister with the presidents and one at officer level, with more to come. We are working through the issues and I have no intention of rushing the Bill through.
‘Effectively it’s on hold while we conclude our discussions, which have been very constructive.
‘LGNSW received the Bill on February 14 and raised no concerns until recently.
‘The processes provided before a performance improvement order are being worked through by the government and LGNSW.
‘Notwithstanding, the minister must give notice of a performance improvement order, state exactly what the problem is – not just to the council but publicly – and the council has 21 days to say what they are going to do to improve.
‘After saying what they propose to do they have time to carry out their plan. It is only if they refuse to solve the problem after all the requests etc have been made that a minister can consider the three month suspension option.
‘The things that could trigger an order to improve would
be non-compliance with state legislation etc or continual refusal to allow a quorum to be formed preventing council from operating.’
He also denies it’s a power grab. ‘To the contrary – it’s a sensible means of addressing problems before they get to a point where after a long period of dysfunction a public inquiry is ordered and a council is sacked, which is the only option now when dysfunction occurs.’
Shadow NSW Labor local government minister Sophie Cotsis told The Echo that what is being proposed is a ‘new section, not an amendment.’
She says she is ‘getting letters from residents about this, and the government should be worried.’
‘They tried to ram this through despite the act being reviewed,’ she said, referring to the Local Government Act 1993, a review of which is due in September.
She claims that 27 councils and mayors across Sydney have also discussed the proposals at a recent meeting. ‘They feel railroaded,’ she said.
Former mayor, independent state and federal member Ted Mack told Fairfax last week, ‘If the government thinks this approach is worthwhile, why stop at local government?
‘Why not give agencies such as the ombudsman, the auditor-general or the ICAC the power to issue ‘performance improvement orders’ against poorly performing state government ministers, with the authority to make recommendations to the governor that these ministers be dismissed if they fail to comply?’
Cookie workers speak out
Shock waves are still reverberating in the Byron Bay Cookie Company after eight Byron Bay and four Sydney staff lost their jobs last Thursday.
Administrators moved in last week on the company, owned by Gordon Slater’s Slater International, following an investigation by the Australian Tax Office (ATO). According to court documents, the company owes around $1.2 million in unpaid Business Activity Statement, Pay As You Go taxes (PAYG), GST and fringe benefits tax.
More astonishingly, it’s emerged from the ATO’s investigation that the company has failed to pay its workers’ superannuation for many years. That is just one of a long list of allegations of mismanagement, including that the company failed to pay suppliers on time, or in some cases failed to pay them at all.
The Echo understands that no other company owned by Slater International is being investigated by the ATO. That includes the retail division of Byron Bay Cookie Company and Byron Bay Gourmet Foods.
Former employees from the company, who wished to remain anonymous, confirmed with The Echo that their superannuation was not paid for at least two years. ‘Despite our payslips indicating that we were being paid super,’ said one, ‘the administrators on Thursday said we were unlikely to receive anything.’
They also said that they were keen to regain employment at the company and want to go back to work. ‘I loved my job and the people I worked with,’ one said. ‘It was a good team, brand and product. If asked to come back I would. We all desperately want the company saved.’
Another said, ‘We want Byron Bay Cookies to continue as it’s a great company. We all love working there and consider ourselves a family. We really need the support of our community to bring us through.’
But as for management, all were critical. Another ex-employee said, ‘[CEO] Gordon Slater had a chance to save the company but he didn’t. The last time he was here was six months ago and he didn’t meet with any factory staff.’ They also said that both Mr Slater and company director Jacqueline Schurig offered no apologies for the company’s collapse, nor any thanks for their work.
As for the way in which the dismissals were handled by administrators, an ex-employee said that, ‘All staff were assembled in the office where we were told what was going on and in the end, eight names were called out. We were then brought into the boardroom where we were told we were officially retrenched while being told that, “It isn’t personal.” “This is personal to us”, one said.’
‘This has not only affected us but our families. Some of us have mortgages – one woman had worked there for 15 years.’ All shared concerns for the wellbeing and future work prospects of the remaining employees.
‘There is a complete sense of shock and everyone is worried.’
Former employee speaks
Another ex-employee, Jackie Castellano, also told The Echo she is owed superannuation for her time at the company.
Ms Castellano says she was originally employed to ‘clean up’ the accounts and the ‘franchise bookwork for the David Jones stores.’ Instead, she claims she was misdirected ‘into a customer services role’, and worked between November 2011 and February 2012.
She told The Echo, ‘I need to highlight foremost that the staff members are wonderful people – they are passionate about the product and love their jobs. I love and respect them all.’ She says that while the workers are ‘loyal to the bone and hardworking honest local people,’ the company lacked adequate management.
‘At times the courier companies would not arrive due to non payment. So even if the goods were baked and boxed they could not be shipped until the money was received. The local telephone repair man would come to fix the phone system begrudgingly and grumble that he shouldn’t even answer our calls due to non payment. The lady suppyling the sanitary bins in the ladies’ toilet did not get paid on time.
‘It got to the point where I was checking my bank account each Thursday morning to see if my pay had been deposited. It was always down to the wire – a Qantas order would need to be baked, boxed and shipped “like now” and there would be no funds, no ingredients... then “wham”, all of a sudden money would arrive into the bank and it would be all systems go to fill the order.’
Ms Castellano says she compiled the November and December 2011 monthly commercial reports, ‘highlighting that the company was not paying its debts as they fell due; that the superannuation liability was continuing to increase and that no payments had yet been made. This report was forwarded to management, who quickly told me not to mention these issues. But I was not prepared to remove them as it was prudent that the directors were advised.’
She believes that her comments were deleted by management before the final draft was issued. She added, ‘I truly hope and pray that this beloved company can be saved and the workers can remain employed.’ Comments were sought from CEO Gordon Slater and director Jacqueline Schurig regarding Ms Castellano’s claims, however they instead responded with a general statement about the voluntary administation.
Talks of expansion
Despite the court action, Mr Slater and director, Jacqueline Schurig are still attempting to talk up overseas expansion plans. Ms Schurig distanced the expansion plans from the court action, telling media last week, ‘The court notice has been issued to only the manufacturing arm of the company, so it has nothing to do with the franchising aspect.’ She also claimed that the appointment of administrators was, ‘an opportunity to restructure the manufacturing division.’
But Australian Packaging managing director Ray Cranfield isn’t so happy. He is quoted on www.foodmag.com.au as saying his company, ‘always had trouble with payments,’ and that the company ‘owes Australian Packaging $33,000 alone.’
‘If a liquidator had been appointed there may be an opportunity for us to recover some trade... and be able to continue with them, but I suppose I’m more upset that he’s been ra-raing his company in the media and saying how terrific the company is and how excited he is about his business, but he’s taken a lot of Australian and overseas companies for their money. You get very angry about those sort of things,’ he said.
‘Small companies like mine get hurt very, very badly when you take $33,000 off the bottom line. I’ve got to pay my employees tomorrow and I will because I’ll most probably have to go into my private savings to do it. I bet this bloke’s not doing that.’
The administrators, Chartered Accountants Lawler Partners, said in a statement that creditors will meet on March 19 and the company will continue to trade for the time being.