The residents of the tiny south coast community of Jervis Bay will continue to have state-based services delivered from three hours away in the ACT, despite pleas for the New South Wales government to take over.
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On Wednesday, the NSW government pulled out of ongoing tripartisan discussions with the ACT and federal governments on how best to deliver services to the residents of the area.
Since the Jervis Bay Territory was surrendered to the Commonwealth in 1915 to afford the capital a sea port, services have been administered by the ACT.
However, the distance between the two areas has meant economies of scale and efficiencies are difficult to achieve.
The ACT delivers services like education, health, vehicle registration and licensing, courts and community and welfare to about 400 residents of the area, which include the Aboriginal community of Wreck Bay.
Residents travel to surrounding areas of NSW to access GPs, dental service or hospitals.
Voter numbers in the latest federal election halved after the community was not properly informed there would not be a polling both on election day and they had to vote the day before.
For the past four years at least, there have been discussions on which government was best-placed to deliver services to Jervis Bay residents.
A 2014 report found the ACT was "not well positioned to delivery state-type services to Jervis Bay Territory".
This week however, NSW stood back from taking on those responsibilities.
"The NSW, ACT and Australian governments have been working together on options for future service delivery arrangements to the Jervis Bay Territory, following the 2014 review of services," a spokesman for the NSW department of premier and cabinet said.
"The NSW government has made the decision not to continue this work, which will not have any impact on the current delivery of government services."
"Any future changes to arrangements will only be made on the basis that there is a demonstrated benefit to the Jervis Bay Territory community."
However, a spokesman for the ACT government said the transition of services from the ACT to NSW would be best for the residents of Jervis Bay in the long term.
"We hope NSW will re-consider, but in the meantime we'll work with the Commonwealth to provide Jervis Bay with the best possible services," he said.
The spokesman also moved to reassure residents there would be no disruption to current services.
