The NSW Government has rejected proposals to demerge two local councils.

NSW Minister for Local Government Shelley Hancock announced this week that she did not have “confidence” in state Boundaries Commission reports into proposals to demerge the Snowy Valleys and Cootamundra-Gundagai Councils.

The commission did not support a proposal to demerge Cootamundra-Gundagai Council, but said it did support the Snowy Valleys demerger proposal. 

Cootamundra-Gundagai Mayor Abb McAlister said he was “distraught” by the minister's decision. Snowy Valley Mayor James Hayes says he is only focused on moving forward.

The commission was called in to review the demerger proposals after community campaigns in both council areas. At its official hearings, the public submissions were overwhelmingly in favour of demerging. However, commissioners were divided on both proposals.

Labor MP Mick Veitch, whose seat is in the Snowy Valley Council area, says the decisions were “not in line with the community's expectations in these two council areas”.

“These communities did not want to be merged in the first place and they want to be demerged now,” Mr Veitch said.

“And that is clearly the information that the boundaries commission heard, and I am gobsmacked the minister has not gone along with the views of the community.

“This decision must be overturned and if it's not going to be overturned, then let the communities chart their own destiny,” he said.

Nationals MLC Wes Fang condemned the government decision too.

“The communities of Snowy Valleys and Cootamundra-Gundagai have followed the guidelines outlined by the NSW government and the independent umpire has subsequently made the determinations,” he said.

“For the minister to set aside the decision and shift the goalposts after an adverse determination is wrong.”