By Julian Bajkowski

Embattled Prime Minister Julia Gillard has bluntly warned Australia’s 560 councils and shires that the forthcoming referendum on Constitutional recognition for local government will be their final chance to guarantee direct funding for projects from Canberra.

Speaking at the opening of the 2013 National General Assembly for Local Government in Canberra, Ms Gillard emphatically urged local governments to get stuck into grass roots campaigning in the electorate to persuade voters to vote ‘yes’ rather than relying on general agreement between politicians to get a result over the line.

“I have got no doubt at all that this referendum, the third time this issue will have been voted on in forty years; this is the last chance for recognition of local government,” the Prime Minister said.

“This campaign won’t be won by federal politicians nodding sagely amongst ourselves and agreeing that the time is right. It will be won where you live, in your towns and cities.”

In a tacit admission that the wider electorate has tuned out of messages emanating from Canberra, the Prime Minister urged the councils to pound the footpath with the reform message and said that “conversations on a street corner can turn into conversations that engage and enthuse a whole community.”

The referendum is being held in a bid to restore legal certainty to local government projects funded directly by Canberra like Roads to Recovery that are in doubt following two High Court decisions on intergovernmental funding flows.

So far the ‘yes’ case has official support from all sides of politics, despite conspicuous rancour from so-called ‘dry’ elements of the Liberal Party.

Despite the support the big problem that local governments face on the referendum is that their reformist message has been drowned by debate whether to replace Ms Gillard as Prime Minister with former Prime Minister Kevin Rudd to stave off an electoral wipe-out for Labor at the 14th September election.

The issue of a pre-election change in leadership for Labor weighs heavily on the local government sector and the referendum because of the likelihood of an early election, possibly as soon as August, in the event Ms Gillard is jettisoned as leader.

While Mr Rudd isn’t talking hypotheticals, the popular former leader has reaffirmed his support for the referendum and the government’s position.

“Mr Rudd supports the Government’s work to bring this to the Australian people,” a spokesman for the Member for Griffith said.

“Mr Rudd is proud of the increased engagement with local government that has occurred under this government including vital partnerships to build community infrastructure and save jobs during the Global Financial Crisis.”

Independent MP Tony Windsor, who was instrumental in forcing a commitment to a referendum after the last election, has already said that an early election should not be an excuse to dump a popular vote on financial recognition for councils.

Whether or not councils and the Australian Local Government Association (ALGA) would be able to run an effective ‘yes’ campaign in the event of an early election is now an issue that many local government leaders will be forced to run a ruler over.

A number of local government leaders are believed to favour holding-over a referendum on local government if an early election is called on the basis that more time is needed to educate and persuade the electorate.

In evidence given by ALGA members to a Parliamentary Committee into the issue of a referendum earlier this year, some local government leaders warned that the political atmosphere was simply too toxic and voter cynicism just too high for the wider electorate to embrace a Constitutional change.

Local government minister Anthony Albanese told Assembly delegates that the Commonwealth will contribute up to $10 million towards a national campaign in support of the referendum.

"I can confirm that funding will be provided to both sides of the debate. Up to $10 million will be provided to ALGA for the 'yes' campaign,"Minister Albanese said.

"Funding will enable a positive, proactive campaign to be held in the national interest. Getting people excited about constitutional change is not going to be easy but there are plenty of opportunities to advocate for the 'yes' case."