By Julian Bajkowski

The prospect of a referendum on direct federal funding to local governments in Australia at this year’s federal election is now effectively dead in the water with the peak national body representing councils moving away from a rushed vote to play for more time to educate a cynical and fatigued electorate.

It is understood the Australian Local Government Association (ALGA) is set to back away from a push to put an amendment to Section 96 of the Constitution to an imminent popular vote, as fears grow that the merits of the proposal would be drowned by toxic politics and rejected by the electorate for a third time – despite garnering bipartisan support.

The real possibility of a third rejection of the direct funding for local governments at a referendum is a nightmare scenario for councils and Canberra  because it would cast grave doubts over the viability, continuity and legality of billions of dollars for local government projects being directly funded by the Commonwealth – including Roads to Recovery – for the foreseeable future.

While there have been two previous referenda on direct funding – in 1974 and 1988 – key stakeholders are wary that a third failure at the polls would see the prospect of funding reform cast into the political wilderness for as long as 50 years.

The vice president of ALGA, Keith Rhoades, told Government News that the idea of constitutional reform needed “oxygen to breathe” as an idea within the wider Australian electorate.

“Holding a referendum, if unsuccessful, will achieve nothing and probably damage the standing of local government in the eyes of the community,” Councillor Rhoades said.

"ALGA has concerns about the limited time now available to complete the legislative requirements at the federal level for the referendum, gain the necessary support of state governments and carry out a successful campaign for constitutional change, especially against the backdrop of a very robust federal election environment."

The move away from a rush to a referendum at the next poll comes just a day ahead of a sitting of a federal Joint Select Committee On Constitutional Recognition of Local Government on Wednesday in Sydney.

Although the likelihood of a referendum question being put to the electorate is largely governed by the recommendation of the Joint Committee, in reality ALGA’s full support is crucial to any bid.

A further compounding issue is that the Joint Committee would be unlikely to produce a report and a recommendation before March, leaving very little time to educate voters in the event an election is called suddenly.

Councillor Rhoades described the future funding ramifications of a referendum failure as “horrendous” and said that direct federal funding had been “proven to be the best way” to get job producing projects up and running quickly.

Asked if this meant waiting for the next election, Councillor Rhoades said “I’d rather take the four year punt than the 50 year punt.”