As a Novocastrian, in exile in Canberra, I agree with a lot of what you say, and would be interested in hearing more. Especially in terms of how such a change could take place.
A simple question, but one not easy to answer.
At a first level, the subdivision of NSW into new states would help, as would the very regeneration of new state agitation itself. However, the fragmentation that has taken place in NSW affects its parts as well, including New England. So there is an issue here.
The processes involved in the subdivision of NSW are not especially complicated in constitutional terms, although a number of practical issues do arise. The real problem has always been politics. That is why the various new state movements have argued for constitutional changes to make it easier to overcome the politics.
If we work on the basis that subdivision will take time, then the question arises as to how the governance of NSW as presently constituted might be reformed. What might be done to make the existing system work better?
A number of things could be done here. However, they will not be easy to achieve for the same reason that subdivision itself is difficult. They require the central government in Sydney to devolve power.
I will attempt to provide an answer to Jacus, but first I need to complete my analysis of New England's changing demography.