You are totally wrong in a rational mathematic (or rather an aritmmetic) sense. You are probably right in an irrational psychological sense though.
Say PAB traded in a range of 5.9c to 6.3c on a particular day. Every trade could be converted as if there was a 10:1 consolidation i.e. trades @ 5.9c, 6.0c, 6.1c, 6.2c & 6.3c would be at 59c, 60, 61c, 62c & 63c, but each trade would be for only one tenth of the number of shares. Each trade would be for the same dollar value. Nothing would have changed for the day's trading in terms of value of shares traded. In this case the consolidation provides exactly the same number of trading increments as in the unconsolidated state (in fact the consolidation provides twice as many trading increments when half cents are included.)
Thus consolidated or unconsolidated provides the same opportunity for liquidity. This same reasoning applies to any consolidation of any penny stock.
Why then does liquidity usually drop off post consolidation of penny stocks? The answer is purely psychological, because the shares are more expensive and trader's can't buy as many of them. Therefore the stock loses liquidity as the traders lose interest. Totally irrational.
[In Neuren's case the 20:1 consolidation provided ten times the trading increments compared to pre-consolidation [one 0.5 increment became a ten cent range i.e. the increment 14.5c-15c became $2.90-3.00, thus providing the potential for far greater liquidity. This potential for liquidity has not been made use of as yet because psychologically driven trader's have shunned it (it has rarely been a trader's toy anyway) and fundamentally it is in limbo awaiting a deal announcement. If all goes well and a favourable deal is announced it is in line for far more liquid trading than would have been available pre-consolidation.]
The above rational facts are why the US does not deal in penny stocks - they provide far less liquidity potential than $2 and above stocks. The ASX is a real backwater.
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