Circulars

What’s new or changing?

• Amendments to the Local Government Act 1993 (the Act) relating to council de-amalgamations have commenced, effective 22 May 2025.
• The amendments replace existing provisions within the Act with new provisions setting out a clearer pathway for councils to seek to de-amalgamate.
• The legislation provides the following in relation to the new de-amalgamation pathway:
  • councils must develop a business case for de-amalgamation with community input so that residents are adequately informed of potential implications upfront
  • the business case must include detailed information about the proposed de-amalgamation, as prescribed by the legislation, such as:
    • details of the estimated financial impacts of de-amalgamation including an estimate of rates and charges following de-amalgamation and any assumed NSW Government funding assistance,
    • details of the future sustainability, long-term strategic plans, and capacity of the newly formed councils to provide services and infrastructure; and
    • proposed governance and operational arrangements including transitional arrangements.
  • the Minister must refer a business case to the Local Government Boundaries Commission for independent review and assessment
  • if the Minister is satisfied by a recommendation from the Local Government Boundaries Commission that a proposal is sound, the council may hold a de-amalgamation constitutional referendum to enable the community to vote on whether they wish to
  • de-amalgamate. Voting in the referendum is compulsory
  • the majority of the community must vote in support of the proposal for the de-amalgamation to proceed
  • the Government may make arrangements to offset the financial costs of de-amalgamation via a grant of up to $5 million and/or a TCorp loan.
• Any council that has been formed by the amalgamation of 2 or more former areas may pursue de-amalgamation under the new pathway.

What will this mean for council?

• Local councils and communities have a new pathway to explore voluntary de‑amalgamations.
• The new provisions include transitional arrangements to ensure that the new process can be applied, as necessary, to in-train de-amalgamation proposals that were submitted to the Minister under former de-amalgamation provisions before the commencement of the legislative amendments.
• The new process does not apply to the Cootamundra-Gundagai Regional Council de-amalgamation proposal which is being progressed via an alternate legislative pathway.

Key points

• The legislative amendments provide a new pathway for councils and communities to pursue de-amalgamation.
• The new pathway requires engagement with the community throughout the entire process to ensure communities understand the consequences of de-amalgamating and can make an informed decision about their future.

Where to go for further information

• The Local Government Amendment (De-amalgamations) Act 2024 is available on the Legislation Register at Local Government Amendment (De-amalgamations) Act 2024.
• A flowchart outlining the new de-amalgamation pathway is available here

Brett Whitworth

Deputy Secretary, Office of Local Government