Proposed de-amalgamation of the City of Canterbury Bankstown

Council has made it clear that any support for a de-amalgamation would be dependent on ensuring any cost is not passed on to residents. A July 2022 Council report indicated these costs were conservatively estimated at over $53 million upfront and over $20 million in annual recurrent costs. Any future cost estimates would need to take into account inflation and changes in labour, goods and service costs since 2022.

Under Section 218CC of the Local Government Act 1993, the Minister may grant a council up to $5 million to offset the cost of de-amalgamation. Any other costs must be funded by the council, which may include a loan subject to interest rates set by the NSW Treasury Corporation, further increasing costs. Any costs not funded by NSW Government grant assistance would need to be met by the relevant council or councils, which could have implications for council finances, rates, service levels or borrowing requirements.

Recent amendments to the Local Government Act 1993 establish the process/es that an amalgamated council or other group must follow if it wishes to pursue a de-amalgamation.

A proposal can be started by:

• The Minister;
• A group of enrolled voters (electors); or
• A council affected by the proposal.

For a proposal initiated by voters:

A group of enrolled voters can submit a proposal directly to the Minister. The number of voters needed depends on the area affected by the proposal. If the proposal affects an entire council area, or proposes a new council area, support is needed from 250 enrolled voters or 10% of enrolled voters in the area, whichever number is greater. 

For a proposal initiated by a Council:

• Preparing, publicly exhibiting, consulting on and submitting a written business case to the Minister for Local Government outlining:
  • The de-amalgamation proposal and reasons supporting it; 
  • The details of consultation undertaken and the council resolution supporting the proposal;
  • Financial information, including costs, funding arrangements, financial impacts and future rates and charges;
  • Geographic information relating to the proposed areas;
  • Proposed governance, operational and transitional arrangements, including staffing, assets, councillor representation and ward structures; and
  • Information about the long-term sustainability, strategic planning and service-delivery capacity of the proposed councils;
• Referral of the business case by the Minister to the Local Government Boundaries Commission for examination and report;
• Following consideration of the Boundaries Commission's report and other relevant matters, the Minister may approve the holding of a de-amalgamation referendum;
• If the referendum is supported by a majority of votes cast by enrolled electors, the Minister may make recommendations to the Governor to give effect to the de-amalgamation. 

The implications would depend on the final de-amalgamation proposal and the outcomes of any business case, referendum and subsequent implementation process. Potential implications could include changes to council boundaries, governance arrangements, staffing structures, service delivery models, asset and liability allocations, the financial position of the new councils and therefore the rates and charges for the new areas. Any proposal would need to address how these matters would be managed and the impacts on residents, businesses and other stakeholders.

The initial provisions for de-amalgamation introduced in the Local Government Amendment Act 2021 No 11 included a 10-year timeframe within which amalgamated councils could de-amalgamate. This timeframe was removed with the introduction of Local Government Amendment (De-amalgamations) Act 2024 No 21.

*This is a cumulative figure and includes carry-forward amounts.