The NSW Government is paving the way for council demergers. 

The state is poised to introduce legislation facilitating local councils' ability to revert to their pre-merger boundaries. 

This move marks a departure from the previous Coalition government's forced amalgamations policy, which saw 19 new councils created through contentious mergers in 2019. 

The new bill will provide a clear framework for councils wishing to demerge, reflecting a growing demand for local governance autonomy.

The initiative follows the successful demerger of Cootamundra-Gundagai Regional Council last year, setting a precedent for other councils dissatisfied with the amalgamation outcomes. 

Minister for Local Government, Ron Hoenig, says the proposed legislation aims to eliminate barriers hindering councils from initiating the demerger process, ensuring that any newly established councils are financially sustainable and that community voices are heard.

Under the proposed bill, councils seeking to demerge must undergo a rigorous process, including a constitutional referendum, ministerial approval, and a formal proclamation from the governor. 

This structured approach underscores the government's commitment to empowering local communities and councils to make democratic decisions about their governance structures.

The forced amalgamations, a brainchild of the former premier Mike Baird, were originally justified by potential savings of $2 billion over 20 years for ratepayers, according to a 2015 report by the Independent Pricing and Regulatory Tribunal. 

However, the policy led to widespread dissatisfaction, including protests, legal challenges, and bitter debates across the state.

Several councils have already expressed their intention to pursue demergers, citing financial viability and community support. 

The Inner West Council, a product of merging Ashfield, Leichhardt, and Marrickville councils, revealed a strong preference among residents for demerging, with a 62.5 per cent vote in favour at the last local government elections. 

Similarly, Snowy River and the councils of Canterbury and Bankstown are preparing their cases to revert to their original configurations.

The financial implications of demerging are substantial, with the Inner West Council estimating a cost of $150 million over 10 years to undo the mergers. 

Despite the financial burden, the NSW government has committed to providing transition funding to support the demerger processes, ensuring that ratepayers have a significant say in the future of their local governance.