The New South Wales Government has announced the introduction of new legislation that is set to provide a new, clearer legal pathway for council de-amalgamations. 

The amendments to the Local Government Act 1993 introduced to Parliament will remove a major roadblock for councils seeking to demerge, including those that already have de-amalgamation proposals under consideration.

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

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 New South Wales Local Government Boundaries Commission.

Following a subsequent independent review by the 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.

New South Wales Minister for Local Government, Ron Hoenig, said that the forced amalgamation of New South Wales councils was a failed and expensive experiment. 

“While the State 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,” Minister Hoenig said. 

“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.”

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