NSW Parliament last week passed amendments to the Local Government Act that will allow councils that have been merged in the past 10 years to submit a business case to reverse the amalgamation. The Local Government Minister would have to respond within 28 days and refer it to the Boundaries Commission.

Save Tumbarumba Shire spokesperson Dr Neil Hamilton said the group would "do everything we can to ensure that there is a council that actually wants a demerger" after the election.

"The [Snowy Valleys] demerger is going to happen one way or another and we have now got several avenues that we can pursue," he said.

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Snowy Valleys mayor James Hayes said the issue would be one for the new group of councillors after the September election.

The demerger issue has flared up again in Cootamundra-Gundagai Regional Council after the Independent Pricing and Regulatory Tribunal granted a special rate variation for a 53.5 per cent increase over four years.

Gundagai Shire in Exile chairman Dr Paul Mara said the "huge rate increase" was a "function of the merger".

"It shows that the community was right as their primary concern was an increase in costs... and none of the claimed benefits have come into play," he said.

Cootamundra-Gundagai mayor Abb McAlister said the rates rise was a "merger tax" and that the community would find it "hard to cope with" but without it the council "would be insolvent by next year".

"They told us we were going to gain economies of scale by being bigger but none of that happened," he said. The council had already voted unanimously to support a demerger.