An announcement to rule out forced council mergers is not an early election tactic, Premier Jeremy Rockliff says.
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The state government said "common sense reforms" would continue to progress despite Sunday's announcement.
"There will be no early election. Our decision is about listening to the community and ensuring that locals get a voice in the reform process," Mr Rockliff said.
"This is your community, your council, and you will decide your future.
"This will ensure the future sustainability of local government in Tasmania."
The news that councils will now make their own decisions on whether to amalgamate has been met with support from community leaders, including the Local Government Association Tasmania.
Local Government Minister Nic Street said by outlining the pathway for council reforms, he hoped to provide some comfort to Tasmanians.
"We are listening, and we know that people want some certainty about what is ahead," Mr Street said.
"I recognise that reform is difficult, change is intimidating, and it's far easier to argue for the status quo.
"However, what is clear from the review so far is that the local government sector does need reform."
Labor's Local Government spokesman Luke Edmunds said the Premier abandoning forced amalgamations is "a see-through attempt to save his own political skin".
"The only fear and uncertainty he's responded to in making this decision is his own fear and uncertainty about his plummeting popularity - including inside the Liberal Party," Mr Edmunds said.
"If the Premier and Local Government Minister Nic Street had really been listening to the community, their grand plans for forced amalgamations would have been scrapped a long time ago."
Acting Greens Leader Rosalie Woodruff commended the decision to rule out forced mergers but highlighted the importance of continuing to work to keep councils sustainable.
"Forcing a change to democratic representation in local government, against the majority view of a community, was always going to be resisted - and rightly so," Dr Woodruff said.
"Ruling out forced mergers is a fairly unsurprising - though overdue - step from the Premier considering the widespread backlash to his approach."
The Local Government Association of Tasmania (LGAT) president and Break O'Day Council mayor Mick Tucker welcomed the news that the government would not force any council amalgamations on Tasmanian communities.
"The three main concerns that the sector is consistently hearing is will there be forced amalgamations, how will the transition occur and who's going to pay for it, and will our community have a voice," Cr Tucker said.
"To ensure that community voices are heard, the reform process must be collaborative with councils and communities. Forcing amalgamations against local community wishes will not achieve this.
"We now can put our head to the grindstone and come up with some real positives so that our future of local government is up to meeting the challenges of tomorrow."
The Local Government Review Board is expected to release its final report on October 31st.
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