The latest twist comes with the belated release of the KPMG methodology report which shows how KPMG calculated purported 'savings' assumed to flow from forced mergers.

Close scrutiny of the KPMG methodology is revealing. The report is replete with grammatical errors, inconsistencies with previous KPMG reports, incompatibility with official reports – such as the Local Government Remuneration Tribunal report – errors of logic, gross oversimplifications and mistakes in selection of appropriate data.

For example, KPMG assumes – without any justification – that mergers will generate 3 per cent savings for city councils and 2 per cent for their country cousins in terms of 'materials and contract expenditure'. However, in its report for a group of southern regional councils KPMG assumes only 1.5 per cent for the same expenditure category!

The report is also noteworthy for what it conveniently neglects. For instance, KPMG simply ignores the costs of 'service harmonisation' post-amalgamation where service quality is equalised across the newly merged councils. We know from the 2008 Queensland amalgamations that costs associated with service harmonisation are considerable.

Similarly, many obvious and well-known transitional costs are overlooked. For example, all newly merged council must have a single headquarters and the costs of relocation, new buildings, and a host of other expense factors must be taken into account. KPMG has ignored these costs.

In aggregate, it is clear that the net effect of these various 'errors and omissions' understates the costs of municipal mergers and overstates their benefits. This fits with earlier machinations of the NSW government, which conveniently ignore not only the results of mergers in Queensland and other states, but the consequences of the 2004 NSW amalgamation.

Professor Brian Dollery is director of the Centre for Local Government at the University of New England.