By Julian Bajkowski and Paul Hemsley

Prime Minister Julia Gillard has finally confirmed that the federal government intends hold a September 14 referendum that if successful would allow the financial recognition of local government in the Australian Constitution, but there are signs of growing tensions and signs of fracturing support for the poll within the Opposition.

After weeks of soft diplomacy with state governments and the unexpected sacking of former Local Government minister Simon Crean over a self-destructive leadership spill, the PM’s Office this morning said it is “is planning to hold a referendum” that it expects “will receive broad and bipartisan support in the Federal Parliament and across the country.”

However in a critical omission, the actual form of words to be put to the people in the referendum was not released in the Prime Minister’s announcement from Brisbane on the morning she left for Port Moresby for talks with the government of Papua New Guinea.

So far Opposition Local Government spokesman Senator Barnaby Joyce has maintained the line that the Coalition is committed to supporting the ‘yes’ case for Constitutional recognition.

However fresh doubts over the strength of the commitment have been sown by Tasmanian liberal hardline Senator Eric Abetz and former Howard government industrial relations warrior Peter Reith who helped derail the Hawke government’s last attempt at securing financial recognition for councils at 1988 referendum.

Although Senator Joyce has been trenchantly critical of the government’s timing and handling of the Committee process required for the referendum, the Nationals Senator has remained steadfast in his view that security of direct federal funding for councils must be assured through a Constitutional amendment before multi-billion dollar projects like Roads to Recovery are jeopardised by any legal challenge following two landmark decisions in the High Court of Australia.

Those cases, known as the Pape case and the Williams case, essentially found that it may not be legally possible for Canberra to fund local government initiatives without first going through the states turning a raft of existing funding measure into an administrative horror story.

The continuation of funding certainty for councils so-far appears to be at the heart of the electoral marketing push for the yes case.

“In just the last five years, the Commonwealth has partnered with local government to deliver over 6,000 community projects such as libraries, indoor and outdoor sporting facilities, pools, walking trails, roads and bridges, in every single community,” the Prime Minister said.

“Our Constitution, which was drafted more than 100 years ago, says nothing about the role of local government and yet most Australians have daily contact with the services provided by their local council, through childcare, sporting fields, swimming pools, libraries, local roads and more.

“Many of these council services are provided in partnership with the Federal Government – something that has been common practice for decades,” Ms Gillard said.

Barnaby Joyce is not convinced that a sell based on common sense and continuity will be enough to cut through to the electorate and immediately took aim at the lethargic pace of progress from the government.

“Prime Minister Julia Gillard’s announcement today that the Government will be supporting a local government referendum a mere four months out before the September election is setting the referendum up for certain failure,” Senator Joyce said.

“The Coalition has always supported the appropriate financial recognition of local government in the Constitution. However, the Labor Party and its ministers have so many things going on at the moment and so many distractions that this whole approach is a mess.

“The Coalition is forced into this invidious position of having to stand by their word to local government but the outcome will be completely compromised by the incompetence of the Green-Labor-independent alliance, Senator Joyce said.

State local government leaders have now fully locked-in behind the September 14 referendum push, despite earlier getting jitters and pawing at a postponement.

West Australian Local Government Association President Mayor Troy Pickard said that it was “critical” the public recognised the importance of the referendum in how their communities were supported.

“A referendum about Constitutional Recognition could easily be glossed over by the public as having little relevance to them but nothing could be further from the truth,” Mayor Pickard said.

“What this referendum means for Iocal communities is that they will at last have certainty for the funding of a range of Commonwealth funded projects that could otherwise be under threat.

Australian Local Government Association president Felicity-ann Lewis has sought to keep all parties supportive on message in the clearly fragile push that could still easily collapse in the wake of Opposition ructions.

Prior to the entry of Senator Abetz and Mr Reith into the debate, the referendum had garnered support from Labor, the Coalition, the Greens and key independent MPs Tony Windsor, Rob Oakeshott and Bob Katter   who effectively forced the government’s hand on the issue as a concession to back Labor to form a minority government.

"We now need bipartisan support and I call on the Opposition, and all political parties, to support the referendum proposal and referendum funding legislation, when it is debated in Parliament next week,” Ms Lewis said.

"We have recently advertised for a National Campaign Director to lead an integrated campaign involving every council across the country,” she continued.

That campaign management will clearly be a challenge with anti-recognition proponents and conspiracy theorists already swarming on social media.

“isn't it unconstitutional to have a referendum and a election on the same day? can't remember where I heard this…. and possibly only unconstitutional to have a state and federal election on the same day (as it was held that a state based plebiscite on the same day as a federal election was unconstitutional),” said one Facebook post.

“they are illegally operating we have had 3 referendums over the years all of them defeated. when state and federal laws conflict then federal laws prevail! this is exactly why people need to learn about our constitution. we will be part of any campaign / action to defeat this” said another passionate observer.

“It will give federal government the means to by pass state governments altogether, it will mean the loss of our sovereignty, our property rights. It is just so so much more at stake” the same poster said.

However there are also more tempered views on the 'no' case.

“I think this debate necessitates a more rational answer than capital letters and talk of LG being unconstitutional. As a Councillor, I wouldn't be supporting the Yes vote because the recommendation is unnecessary,” said a post under the name of The Hills Shire Council Deputy Mayor Andrew Jefferies.

“LG is state act and there is nothing to prevent a Federal Govt providing Councils with the funds to deliver local infrastructure projects. The crux of the argument from those supporting a referendum and a yes vote is that state government too easily cost shifts many of the problems onto local councils. In NSW, the pool inspection program is a prime example. However, the challenge in Government should always be to make do with what you have and not spend more than you receive. Too many councils are guilty of poor financial management and are looking for a new revenue stream to to solve their problems. Thankfully the council I represent is not one of them.”