Shellharbour MP Anna Watson has described NSW government's move to abolish the Lake Illawarra Authority as "an unseemly bureaucratic mess".
Legislation to formally abolish the LIA was introduced to Legislative Assembly last week, a year after the NSW government announced the LIA would be replaced by "an estuary management committee".
The LIA board was disbanded in July 2013, however, an estuary management committee is yet to be established, with Wollongong City Council holding out over funding concerns.
Last week the NSW government introduced the Trade and Investment Cluster Governance (Amendment and Repeal) Bill 2014, which would dissolve a number of government bodies including Screen NSW, the NSW Dairy Industry Conference and the LIA.
The bill passed through Legislative Assembly, and is expected to go before the Legislative Council this month.
During the debate Wollongong MP Noreen Hay said what was most disturbing was the failure of the government to communicate with Shellharbour and Wollongong councils, particularly in regards to funding.
Ms Watson said that over the past 12 months "we have witnessed an unseemly bureaucratic mess with the usual finger-pointing and buck-passing".
"The government needs to put secure ongoing funding and governance arrangements on the table that do not expose Wollongong and Shellharbour local government area ratepayers to decades of ongoing expenses and contributions for the management of Lake Illawarra," she said.
"The government does not need to reinvent the wheel. The LIA was, and remains, a successful model. It should be re-established, not abolished.
"The committee, if it is ever formed, will be a tangle of bureaucratic paper shuffling, finger-pointing and blame-shifting."
The Liberal MP for Baulkham Hills David Elliott said the LIA had achieved its objective and now acted as "a duplicate to the local council in that area".
"It is more appropriate to create efficiency by removing duplicate organisations ... it will make it easier for stakeholders to know who to deal with," Mr Elliott said.
The Nationals Monaro MP John Barilaro said cost shifting was "a red herring".
"An estuary management committee is a commonly used mechanism to manage this land," Mr Barilaro said.
"The dissolution of [the LIA] was the subject of a review, including public consultation."