By Julian Bajkowski

A leaked letter from Queensland Premier Campbell Newman to Prime Minister Julia Gillard reveals that the state government is behind the proposed wording of a Constitutional amendment pivotal to a referendum and does not believe the change will erode state powers over local government.

A copy of the letter obtained by Government News explicitly backs “the holding of a referendum at the time of the 2013 Federal election, or on a fixed date in 2014, to support appropriate recognition of local government in the Constitution of the Commonwealth of Australia.”

The revelation of the strength of Queensland’s support for a referendum on financial recognition of local sets the stage for a new showdown between hold-out states, including Western Australia and New South Wales, over whether or not critical projects that rely on direct funding, like Roads To Recovery, can survive a legal challenge.

Queensland potentially has the most to lose of any of the states if direct funding of local government projects is frozen by a new legal challenge because it is home to many local governments and areas where infrastructure has been decimated by consecutive natural disasters at a time when state funds are tightly constrained.

Mr Newman’s letter says that “It is the Queensland Government’s view that constitutional recognition that does not diminish the State’s primary constitutional responsibility for local government is appropriate given the breadth of interaction over recent decades between the Commonwealth and councils, and the legal uncertainty about funding that has arisen from the decisions of the High Court in the Pape and Williams cases in recent years.”

The leaked letter also specifically cites the Roads to Recovery program in terms of Queensland’s support for “clarifying the legalities of direct funding of key local government infrastructure projects” as well as “major tunnel and rail projects.”

Getting other states to support the Constitutional amendment has been a key impediment to federal Local Government Minister Simon Crean as the Committee process that ultimately provided the recommendation to go to a referendum runs perilously close to running out of time.

There is a widely held view that unless the states agree to either support the referendum or ‘play dead’ – that is agree not to mount an opposition campaign – there is little prospect of the a ‘yes’ vote succeeding.

A further wildcard from the states has been dealt into the equation following the shock resignation of Victorian Premier Ted Baillieu last week and his replacement by Denis Napthine.

The diminishing amount of time to educate and persuade the public has also caused Mr Crean to caution that although there is across the board federal support for a referendum at the 14th September election cross-jurisdictional consensus would have to be garnered in the next six weeks.

“The only dissent is whether there is time,” Mr Crean said. “History shows that we need the bulk of the states on board as well as bipartisanship at a Federal level or it will fail.”

The very mention of failure immediately prompted Opposition Local Government spokesman, Senator Barnaby Joyce, to again accuse Mr Crean of setting up the referendum process to fail at the last minute.

“It just sounds like the Minister [Mr Crean] is finding an excuse to walk away without having to say he is walking away,” Senator Joyce said, adding that Mr Crean “has given himself six weeks to get the support of the state governments for a referendum to recognise local government in the Constitution.

“Given that two of the states have been publicly opposed for years, and that the Government has done nothing to convince the states otherwise for more than five years, it is not exactly clear how the Minister will achieve this.”

The matter of a referendum on financial recognition of local government is expected to go before federal Cabinet shortly.