Amalgamations in New South Wales

Carol Mills, Institute for Public Policy and Governance, University of Technology Sydney

Relevance of the Practice

On 12 May 2016, the New South Wales (NSW) Government announced the amalgamation of 42 local governments into 19 new councils. The stated objective was to strengthen the local government sector by increasing financial sustainability and efficiency. However, local government amalgamations not only require a re-drawing of boundaries, but also a re-establishment of local representation, decisions about alignment of services across the former council areas, and creation of an amalgamated workforce.  It was also difficult to see how the merger of two financial struggling rural councils could immediately result in a high functioning, sustainable new entity.

Further, the amalgamations in NSW focused on simply collapsing existing historical boundaries rather than taking the opportunity to strategically realign councils around contemporary economic or social communities or sub-regions.

The study of this practice is relevant to researchers as it will help them identify and discuss the relative merits of larger versus smaller local government organisations, drivers of efficiency, the role of incentives, evaluative tools, and other similar topics. Particular areas which could be considered include: the question of the responsiveness of service delivery versus efficiency; the effects of amalgamation on local representation and community engagement; and, differences in the challenges of amalgamation faced by urban versus rural councils.

Description of the Practice

The new council structure in NSW has been in place since 2016. Local government amalgamations took place across the state, covering urban and rural/regional areas from metropolitan Sydney to the more remote areas of the state. These newly created organisations have been in operation for approximately four years.  Some have stabilised, while others are in financial difficulty and a small number are still looking to de-amalgamate. The next round of local government elections is due to take place in September 2021 and this will be the first opportunity to gauge community views on the performance of the new entities.

Assessment of the Practice

The stated objective of the local government amalgamation process in NSW and other states was to strengthen the financial sustainability and efficiency of the sector. Whether this objective has been achieved is still a contested question. An analysis of the reform process to date would provide insight as to whether the sector is on track toward achieving these goals.  In addition, these mergers have implications for other aspects of local service delivery, representation and democracy.  For example, in NSW, the number of councillors for a local government area is capped at 15 (Section 224 of the Local Government Act 1993). The result is often that when a council is merged the number of residents one councillor represents can increase dramatically. The implications of this change for local representation and decision-making are currently unknown.

References to Scientific and Non-Scientific Publications

Bell B, Dollery B and Drew J, ‘Learning from Experience in NSW?’ (2016)  35 Econ Pap 99 <>

Farid Uddin K, ‘NSW Local Government Reform: Council Amalgamation, Antagonism, and Resistance’ (2018) 18 Journal of Public Affairs e1725

Sansom G, ‘Debate: The Case for Local Government Amalgamations in Sydney: Fact and Fiction’ (2015) 35 Public Money & Management 65 <>