That debate attended by Jeff Kennet a few months ago, he was tongue in cheek arguing for Tassie , Victoria and South Australia should amalgamate into one state....He could well be closer to the truth than he thinks.
The same underlying problems still exist, i.e. location/geography, population size/distribution, local resources or lack there of. Amalgamation doesn't fix any of those. All it does is create a bigger and usually more unwieldy and inefficient bureaucracy.
Unless of course the the bigger amalgamated bureaucracy ensures wealth/industry/jobs are redistributed to the areas that need some help. In the free market economy that doesn't happen does it?