Inner west Council de-amalgamation: Local Government Minister Ron Hoenig, NSW Boundary Commission reject bid over financial concerns

A bid to de-amalgamate a Sydney council has been shut down over financial fears and an objection from the NSW Government. See what it means here.

A Sydney Council is locking horns with the NSW Government over its attempt to de-amalgamate, after a landslide vote saw residents wanting out of the current local government model.

A total of 63 per cent of inner west residents voted to de-amalgamate the council, however, the bid was rejected by Local Government Minister Ron Hoenig and the NSW Boundary Commission, with claims the council failed to submit a detailed demerger plan.

More than 64,000 residents from the inner west voted in favour to de-amalgamate in 2021, citing reasons of improved local representation and service level improvements.

But Local Government Minister Ron Hoenig said the move was not financially viable.

Ron Hoenig, Minister for Local Government and Member for Heffron.

Independent analysis submitted to the NSW Boundary Commission by Deloitte, revealed a one-off demerger could cost up to $39.1m, with ongoing costs equating to $114.1m over four years.

The ballooning financial forecast led to the Local Government Minister backing objections to the de-merger, citing financial disadvantage to residents.

residents vote to de-amalgamate the inner west.

“The report recommends the proposed demerger of Inner West Council should not proceed, stating this would be the best outcome for residents and ratepayers of the current local government area,” The minister said.

“Consigning three new councils to budget deficits each year until at least 2028 would not be in the best interests of the Inner West community.

“I understand sections of the community may be disappointed but this decision delivers certainty for the people of the Inner West.”

However, a council representative said costs for the demerger were “grossly inflated”.