By Julian Bajkowski

Legislation to make a local government referendum on 14th September has finally cleared the Senate amid a widening split in the Coalition that resulted in seven members of the Opposition cross the floor to vote against the bill and at least as many abstaining.

The last minute bid to shoot down referendum support from within the Opposition has raised fresh doubts over whether Coalition leader Tony Abbott can now keep a lid on rising anger within key factional elements of the Liberals that remain bitterly opposed to any move perceived plan to dilute existing powers of the states.

The public displays of anger and resentment over support for direct funding for local government within the Coalition is quickly shaping-up as a major internal problem for Tony Abbott who must juggle the deeply held and competing interests of the regionally based Nationals and hardline ‘dry’ Liberals – many of whom would prefer just one party.

Critically, one of those who refused to vote for the legislation by abstaining was the Opposition’s Leader in the Senate, Tasmanian Senator Eric Abetz who was reportedly joined by Michaelia Cash, Mathias Cormann, Concetta Fierravanti-Wells, Mitch Fifield, David Johnston, Michael Ronaldson and Scott Ryan.

The ABC’s national morning current affairs program AM reported on Tuesday that “no recriminations” will flow within the Coalition from the Senate defiance and walkout, but the incident will do nothing to soothe rising tensions between the Coalition parties on the issue.

The strength of numbers behind the Coalition’s public split has raised clear questions over why Mr Abbott chose to give Opposition backing to the local government referendum given that so many in his own ranks are now conspicuously seeking to shoot it down.

One likely reason, irrespective of who wins the 14th September election, is that well-established and popular project funding mechanisms may cease to be an option for an incoming Abbott government.

Certainty of direct federal funding is the main reason that the referendum has been put forward as to fix legal doubts after two successful High Court challenges.

A further successful court challenge to federal funding – such as that used for the $3.5 billion Roads for Recovery program – under Section 96 of the Constitution could strip an incoming Abbott government the kind of kind of flexible and timely options so successfully exploited by former Prime Minister John Howard to expedite regional projects that might otherwise be stalled by the states.

Such a threat to direct funding could also soon be more of a reality than just legal theory.

Queensland government sources have told Government News that they believe that Ronald Williams, the plaintiff who successfully challenged direct Commonwealth funding of John Howard’s contentious school chaplaincy program in state schools in a landmark High Court Case, is preparing a fresh challenge. Government News is seeking to clarify whether this is the case.

At the same time, many Liberals and self-identified conservatives remain fiercely opposed to any Constitutional recognition of local government, even at a purely financial level, on the basis that the existing state structures are sufficient and there does not need to be another tier of government.

They include former Commonwealth Treasury Secretary and Nationals Senator (Qld) John Stone who used ABC Radio in Sydney on Tuesday morning to openly attack the Nationals’ support for the ‘yes’ case in the referendum and brand his former party’s position on the issue as a “disgrace”.

Asked for a response to Mr Stone’s comments, Nationals Senate Leader Barnaby Joyce told Government News that the former Treasury head was “entitled to his opinion” but again reaffirmed his support after for the referendum and the ‘yes’ case after one commercial television political correspondent suggested on radio that he was against it.

However Senator Joyce repeated his criticism of the government’s management of the referendum as “appalling.”

Another high profile opponent of is former South Australian Senator and Howard era Finance Minister Nick Minchin who is actively campaigning for the ‘no’ case in the referendum along with conservative think tank the Institute of Public Affairs.

A significant element of the referendum row both within the Coalition and as part of the wider debate is that the ‘no’ case has been allocated federal funding of just $500,000 while the ‘yes’ case has been allocated $10 million thanks to a formula based on who initially voted for and against the legislation in the House of Representatives.

At an official administrative level, the upshot has been that because only two Coalition Members voted against the referendum bill (one of whom was Alex Hawke) the ‘yes’ case is overwhelmingly better funded than the ‘no’case, a situation that many opponents have seized upon as proof of a conspiracy by both sides of politics to try and sneak the legislation through.

It has been reported that Mr Abbott wrote to the Prime Minister last week seeking equal funding for the ‘yes’ and ‘no’ camps but is yet to receive a reply.

How successful ‘no’ campaign will be in persuading voters remains to be seen.

Away from the political static, the level of general electoral support or opposition to financial recognition for local government in the Constitution through gauged through polling conducted in May by Nielsen for the Australian Financial Review found that 65 per cent of respondents said they would vote ‘yes’ while just 18 per cent said they would vote ‘no’ with 17 per cent undecided.

However while the Nielsen poll correlates with similar research by the Australian Local Government Association (ALGA), the sweep was taken between May 16th and May 18th and well before any significant campaign against the ‘yes’ case emerged.

The defiant split within the Coalition has also left ALGA with a much more difficult task to persuade voters to vote ‘yes’ as the campaign proper commences.

The so-called ‘council of councils’ finally revealed its choice of Digby Nancarrow as campaign manager for the ‘yes’ case at its annual General Assembly in Canberra last week after initial difficulties attracting suitable candidates to fill what is ultimately a short term role.

Mr Nancarrow has an advertising agency background and previously worked on the ‘no’ case for the Republic referendum and has held roles with Tennis Australia.

Whether Mr Nancarrow can see out his job until September could still depend on the Labor Caucus as highly visible leadership tensions provide manna for the Opposition continue to drown out Labor’s policy narrative.

Although Caucus ostensibly met for the last time on Tuesday, it is still possible to recall members to Canberra for a Labor leadership ballot after both hoses rise at the end of the week.

Independent MP for New England, Tony Windsor has previously hypothesised that this could be the most likely scenario for a bid to reinstall Kevin Rudd because it would not provide the Opposition the opportunity of moving a threatened no confidence motion that, if carried, might potentially install Tony Abbott as an interim Prime Minister.

In the event that there is a change in Labor leadership and an early election is called, the referendum would, short of a miracle, be dead in the water.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at editorial@governmentnews.com.au.  

Sign up to the Government News newsletter