NSW Local Government Minister Shelley Hancock has been accused in state parliament of "gagging" Dubbo councillors from raising "concerns about former mayor Ben Shields' behaviour", when she issued a Performance Improvement Order earlier this year.
Greens MP David Shoebridge raised his concern in a Budget Estimates inquiry on Monday. He questioned the timing of the PIO, which was formally issued to Dubbo Regional Council by Minister Hancock on June 29.
In a letter issued to the council at the time, Minister Hancock outlined the reasons for the PIO, including "evidence that some council staff are feeling bullied and harassed by some councillors which has resulted in them having to seek medical advice and have time off work".
Council is no longer under the order, which was finalised in September.
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In Monday's planning and environment committee hearing, Mr Shoebridge questioned the timing of the order which extended to the then-date of council elections in September.
"Do you think that was appropriate, issuing what effectively was a gag order on the councillors about raising concerns about former mayor Shields' behaviour in the lead-up to the council election?" he asked. "Many people saw that as effectively a gag order, stopping critique of a former Liberal mayor."
Ms Hancock denied there was any intention to issue a gag order.
"This was a PIO which was for the whole council to realise that their behaviour at the time - and I am not talking about any one particular individual here - was not acceptable in the community" she said.
"There was a great deal of concern within the Dubbo community."
Mr Shoebridge referred to "a series of very disturbing allegations" about Mr Shields which "came out in the first half of this year", citing "concerns about his conduct involving Taronga Park zoo" as well as "concerns about involvement on Blueridge estate".
"The effect of putting everything down the code of conduct path was to put a blanket over any public discussion because, once a matter was the subject of a code of conduct complaint, it was a breach of the code of conduct from a councillor then to talk about it in public," he said.
Ms Hancock said that complaints being made through official channels were more appropriate than allegations being made publicly which, when investigated, may prove to be unfounded.
"Councillors and/or officials needed to be aware of the fact that if they wanted to make complaints, they should have done it through the official channels, whether that is through the Office of Local Government or ICAC."
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