More than 10 councils in regional NSW are set to avoid further forced mergers after emboldened Nationals leader John Barilaro hit the brakes on one of Mike Baird's signature policies, the day after the Premier announced his resignation.
In a statement on Friday Mr Barilaro, the Deputy Premier, vowed "to put an end to the local government mergers in the bush".
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Mike Baird retires from politics
NSW Premier Mike Baird has announced he is stepping away from politics. Vision courtesy ABC News 24.
Mr Barilaro's stance means cancelling the proposed mergers of Armidale Dumaresq and Guyra with Uralla and Walcha; Bathurst's merger with Oberon; Blayney's with Cabonne and Orange, and Dungog's merger with Maitland, Mr Barilaro's office said.
But it does not affect Shellharbour's merger with Wollongong, or the merger of Newcastle and Port Stephens, except insomuch as Dungog crosses Port Stephens' boundaries.
"The policy of local government amalgamations has impacted 20 councils, 12 of which are in regional NSW causing uncertainty and anger, and others are locked in costly legal action - that all stops today," Mr Barilaro said.
The Treasurer, Gladys Berejiklian, to be selected as premier by the Liberal party room on Monday, said she welcomed the chance to work through tough issues.
"If I'm selected on Monday I'm looking forward to sitting with the deputy premier and discussing those issues, which both of us feel strongly about," Ms Berejiklian said.
The controversial forced amalgamations policy was driven by Mr Baird and endorsed by the cabinet, despite widespread opposition.
![NSW Deputy Premier John Barilaro after a press conference where Premier Mike Baird announced his resignation in Sydney. ...](/web/20170120090947im_/http://www.smh.com.au/content/dam/images/g/t/u/k/3/u/image.related.articleLeadwide.620x349.gtvb0n.png/1484892214596.jpg)
However, the issue was blamed, along with the aborted bid to ban greyhound racing, as a factor in the Nationals' disastrous loss in last year's Orange byelection which resulted in Troy Grant resigning as party leader.
The Nationals' new-found opposition to forced mergers will not affect councils in Sydney that are fighting their mergers through the courts.
In a statement Minister for Local Government Paul Toole, a Nationals MP, said: "The Deputy Premier has today made his position on future regional mergers clear and this is a position I respect.
"Any future policy changes on local government reform will be a matter for cabinet," Mr Toole said.
Opposition Leader Luke Foley dismissed Mr Barilaro's call as "a search for relevance".
"He'll huff and puff and demand something and [Gladys Berejiklian will] give it to him so he can say he's delivering for the people in the bush they've abandoned in the past few years," Mr Foley said.
Mr Barilaro's position will expose the government to claims that it is pursuing one policy for Nationals-held areas, and another for the rest of the state.
Marianne Saliba, the mayor of Shellharbour, said there was "no doubt" her area was a regional centre and should also be spared amalgamation.
Cr Saliba said it would be a "very political move" if Mr Barilaro did not also spare councils that were not held by Nationals members.
"Rather than the comments that the Deputy Premier has made about listening to the people of regional NSW, that would tell me he's just being political," Cr Saliba said.
Keith Rhoades, a Coffs Harbour councillor and the president of Local Government NSW, said the government should not proceed with metropolitan mergers either.
"Finally a leader of a party is taking notice of what the community is saying," Cr Rhoades said.
The state government has argued merged councils are better-equipped to provide community services. The government has said merged councils would save about $2 billion in total over 20 years through more efficient running costs.
Patricia Forsythe, the executive director of the Sydney Business Chamber, said the remaining council mergers in the city needed to go ahead.
"Sydney has too many councils to achieve effective strategic planning goals," Mrs Forsythe said.