Media Releases

De-amalgamation bill delivers certainty for NSW councils

Ron Hoenig – Minister for Local Government

Tuesday, 6 February 2024

The NSW Government has introduced new legislation that will remove a major roadblock to council de-amalgamations and ensure local democracy is enshrined in the decision-making process.

The amendments to the Local Government Act 1993, introduced to Parliament today, will provide a new legal pathway for NSW councils seeking to demerge, including those that already have de-amalgamation proposals under consideration.

The amendments repeal the legally flawed section 218CC of the Act and replaces it with a clear and democratic process.

This follows years of failed policy making by the former government that left councils across NSW in limbo and failed to take into account the budgetary impacts for NSW taxpayers on proposed de-amalgamations.

Under the changes, councils wishing to de-amalgamate must develop a robust business case upfront. This must consider the financial impacts and council’s ability to fund de-amalgamation, long-term strategic plans and the service delivery capacity of the new demerged councils.

Councils will also be required to undertake community consultation on the business case.

Upon receipt from a Council, the Minister must forward a business case to the NSW Local Government Boundaries Commission.

Following a subsequent independent review by the NSW Local Government Boundaries Commission, the Minister may then approve a constitutional referendum with a compulsory vote, which would require majority support from local electors to proceed with a de-amalgamation.

In addition, the Government’s Bill provides transition arrangements for councils which have already been approved for demerger by the Minister.

Quotes attributable to Minister for Local Government Ron Hoenig
“The forced amalgamation of NSW councils was a failed and expensive experiment.

“While the NSW Government strongly supports a clear process for councils and communities to exercise their democratic right to pursue de-amalgamation, we also have to be realistic about some of the challenges this brings.

“It’s why one of my main priorities as Local Government Minister has been to find a way to remove the roadblocks posed by the existing demerger process, and give communities the opportunity to decide.

“These amendments the Government has introduced provide a clear path forward for councils wishing to de-amalgamate, providing much more clarity for current and future proposals.

“However, it’s essential that local democracy is enshrined in the decision-making process so that councils and communities are fully informed of the financial and other implications of de-amalgamation.

“The amendments we have introduced are more pragmatic than other legislative proposals being put to Parliament and ensure de-mergers can be effectively managed by councils and that any new councils are financially sustainable.”

Flow chart of the proposed de-amalgamation process here.

MEDIA: Clare Dowswell | Minister Hoenig | 0448 540 073