By Julian Bajkowski

Prime Minister Julia Gillard has rewarded Anthony Albanese, one of the key protagonists in the attempt to unseat her, with the Local Government and Regional Development portfolio as fresh uncertainty over the prospect of a referendum to guarantee federal funding for councils grows.

In an announcement on Monday, Ms Gillard said that Mr Albanese had been promoted to take on the “the critical role of Minister for Regional Development and Local Government, taking over the work done by Minister Crean across regional Australia since the 2010 election.”

While Mr Albanese’s appointment delivers a minister with undoubted competency, it has done so by lumping in Mr Crean’s former ministries into a new mega-portfolio that will have to be integrated in the six months immediately prior to the September 14th election.

Mr Albanese is already very well known to the local government sector having served as Minister for Local Government from 2007 to 2010.

The question of whether Mr Albanese will pursue Constitutional change through a referendum on financial recognition for local government has become the central question for local government groups that immediately welcomed the new minister’s appointment.

Australian Local Government Association (ALGA) President, Felicity-ann Lewis said she would be seeking a meeting with Mr Albanese as soon as possible.

"It is important that we meet with Minister Albanese as soon as possible to discuss the current priorities facing the local government sector, including the constitutional recognition of local government," Mayor Lewis said.

"Having worked as Minister for Local Government previously, we hope that Minister Albanese will be able to take forward the case for constitutional recognition of local government."

A specific diary item that ALGA is chasing from Mr Albanese is an urgent meeting of state and territory local government ministers organised by Mr Crean and scheduled for the 4th April to 5th April in Hobart called to thrash out details and work on planning for a 2013 referendum on financial recognition.

“We are keen to find out if this meeting is still able to go ahead under Minister Albanese," Ms Lewis said.

Ms Lewis also welcomed the appointment of Catherine King as Minister for Regional Services, Local Communities and Territories and Road Safety.

“ALGA has worked closely with Ms King on road safety issues in the past and we look forward to engaging with her in her new role," Ms Lewis said.