By Julian Bajkowski

A referendum that could give financial uncertainty to federally funded local government projects like Roads to Recovery is again in doubt after another outbreak of internal attacks within the Labor that threaten to topple Prime Minister Julia Gillard.

Less than week after crucial legislation to hold a referendum finally cleared the House of Representatives, there is confusion over whether or not a corresponding poll on granting financial recognition for more than 500 local governments can go ahead if the 14th of September election date is brought forward by a new Labor leader.

The prospect of new election date stems directly from growing despondency inside the Labor caucus that the party faces obliteration at the ballot box unless it removes Ms Gillard and reinstalls ousted Prime Minster Kevin Rudd to arrest growing electoral loathing.

A last minute leadership change would essentially leave both the election date and referendum at the behest of a new Prime Minister with reports and commentators already citing the possibility of an early August election date.

Bringing the election date forward would force those campaigning for a ‘yes’ vote – essentially the local government sector itself – to rapidly bring forward its planned $10 million campaign and publicity blitz to persuade voters that change is necessary.

One of the key reasons that the referendum is being held at all is because key lower house independents Tony Windsor and Rob Oakeshott extracted a commitment to a poll as a part of their bargain to provide the necessary support to Julia Gillard and Labor to form government under a hung Parliament.

Since then, creating certainty of funding from Canberra for local government projects via a Constitutional tweak has mustered cross-party support across the Coalition, Labor, Greens and the independents.

Mr Windsor told Government News this morning that he did not see a reason why the referendum should not go ahead and that it was one of the more electorally popular policies around.

“I can’t see why you would need to move it,” Mr Windsor said.

Another potential insurance policy for the referendum in the event of a leadership swap is that Federal Labor’s Minister for Local Government, Anthony Albanese, has been a known supporter of Kevin Rudd and yet managed to retain his position in Cabinet.

Ironically, it was Mr Albanese’s predecessor, Simon Crean, who forced the last implosive Labor leadership – where Mr Rudd did not stand – only to be relegated to the back bench and giving Mr Albanese a return stint in the local government portfolio.

While the Opposition has been fiercely critical of Labor’s handling of the slowness of process to get to a referendum, it’s Local Government spokesman Senator Barnaby Joyce – who is now running for Mr Windsor’s lower house seat of New England in New South Wales – has remained an ardent supporter of the need for financial recognition of local government.

If Mr Rudd was to replace Ms Gillard, the risk in abandoning the referendum is that it could easily be attacked as his first broken promise, a well place sourced suggested.