Local Government Reform


In May 2016, the area south of the M2 Motorway was removed from Hornsby Shire by the State Government and given to the City of Parramatta Council. Hornsby Shire Council strongly protested that decision. The NSW Government’s plan at the time was to merge Ku-ring-gai Council with the remainder of Hornsby Shire Council  That plan did not proceed.

The residents of Hornsby Shire remain significantly disadvantaged by the boundary changes that occurred, despite promises from the NSW Government that Council and residents would not be worse off.

Effect of the NSW State Government decision

The loss of territory has stripped $10 million net per annum from the budget bottom line of Hornsby Shire Council. In an attempt to remedy that situation, Council submitted an Alteration of Boundaries Proposal to the Minister for Local Government and repeatedly produced evidence demonstrating the real impact that the loss of the area has had on Council’s ability to provide services to its residents.

The NSW Government has resisted Council’s attempts to have the area south of the M2 Motorway returned to Hornsby Shire, but it has publicly promised that Council and the residents of Hornsby will not be worse off as a result of the Government’s actions.

NSW State Government partial compensation

The Government’s first steps in meeting this promise was to provide Council with a grant of $90 million to assist in the rehabilitation of Hornsby Quarry ($50 million) and the development of parkland on the former Westleigh Water Board site now owned by Council ($40 million). The rehabilitation of the quarry will take a spoiled piece of land and turn it into 50 hectares of parkland a short walk from Hornsby’s CBD, while the Westleigh project will provide much needed sporting fields and recreational spaces. It is important to note that the grants from the Government will not meet the full cost of the two projects.

Although the grant money was welcomed by Council, it is not enough to undo the damage caused by the Government’s actions. The Government has publicly committed to providing further compensation, with a number of specific assurances that this would be forthcoming before the March 2019 State election, but it did not materialise.

Council's resolution

It is important for all relevant information to be included on the public record so that the Hornsby Shire community is fully aware of the consequences of the failed local government reform process as it applies to Hornsby Shire Council. It is also important that residents are aware of the efforts that have been undertaken by Council to seek justice in this matter. To achieve this aim, Deputy General Manager’s Report No. CS7/19 was submitted for Council’s consideration at the 13 March 2019 General Meeting.

Report No. CS7/19 was structured to provide Council with a complete record of the local government reform process that has been in train since 2011; to show Council’s significant contribution to the reform process; to detail Council’s struggle to convince the Government that its actions have had an ongoing and significant financial impact on Hornsby Shire; and to advise on the compensation that has so far been forthcoming from the Government.

Following Council’s consideration of the Report, it was resolved in part that:

  • Council note that to date, the NSW Government has provided $90 million tied to specific capital projects to compensate Hornsby Shire for the loss of these lands and note that BIS Oxford Economics have identified that a further amount of $168 million would be required to fully compensate Hornsby for the loss of the lands south of the M2 Motorway.
  • On behalf of the residents and ratepayers of Hornsby, Council place on record its disappointment that during the current term of this NSW State Government they have failed to address the issue of the outstanding compensation for Hornsby Shire despite ongoing negotiations and the provision of additional financial information requested by the Government.
  • As advocates for the Hornsby Shire, Council continue to press this issue with whomever forms Government in NSW after 23 March 2019.
  • Deputy General Manager’s Report No. CS7/19 and all other relevant documentation associated with the Fit for the Future Local Government Reform Program be placed on Council's website, so that interested residents can view the issues and Council's response.
  • Council write to both the NSW Premier and the Opposition Leader seeking their commitment to fully compensating Council for losses sustained as a result of the loss of land south of the M2 Motorway should they be elected. This compensation must contain a cash component not tied to projects in order for Council to adequately invest the funds for ongoing long term revenue.


In line with Council’s resolution, the following documents are provided for the information of the residents of Hornsby Shire:



NSW Government launches a program to work with stakeholders across the State to plan for the future of local government in NSW (Destination 2036)


NSW Government establishes the Independent Local Government Review Panel (ILGRP) and Local Governments Acts Taskforce (LGAT) to make recommendations on local government reform


Hornsby Shire Council (HSC) commissions independent research on the effect of local government reform and potential options for mergers with adjoining councils


NSW Government releases responses to the ILGRP and LGAT recommendations (under the Fit for the Future banner). A proposal for the merger of HSC with Ku-ring-gai Council (KC) is included.


NSW Government announces proposals for 35 mergers across the State (and the holding of public inquiries in respect of each). A proposal for the transfer of the HSC area south of the M2 Motorway to the City of Parramatta Council (CoPC) is included.


NSW Government proclaims mergers across the State, including the transfer to the CoPC of the HSC area south of the M2 Motorway. Government also endorses a merger of the HSC area north of the M2 Motorway with KC, subject to the conclusion of Court action commenced by KC against the merger.


Supreme Court upholds KC’s appeal against its merger with the HSC area north of the M2 Motorway

HSC continues to provide services to area south of the M2 Motorway under a services agreement with the CoPC.

HSC submits an Alteration of Boundaries Proposal to the NSW Government seeking the return from the CoPC of the former HSC area south of the M2 Motorway.


HSC defends a claim from the CoPC in the Supreme Court in respect of rates and developer contribution income potentially due from HSC – settlement achieved in November 2018

HSC receives $90 million from the NSW Government for the Hornsby Quarry and Westleigh Park projects as part compensation for the loss of the area south of the M2 Motorway. Advised that the area south of the M2 Motorway will not be returned


Discussions and negotiations continuing with the NSW Government in respect of $168 million further compensation which is due and payable to HSC by the NSW Government