SENATOR Barnaby Joyce says he will vote in a referendum to recognise local governments in the constitution and allow federal funds to flow directly to them.
But he has slammed the federal government's timing of the announcement and its failure to say what the exact wording of the referendum will be.
Prime Minister Julia Gillard launched the "yes" campaign for the referendum on Thursday
At the federal election on September 14 voters will be asked to decide whether local councils and shires should be recognised in the Constitution.
Mr Joyce told reporters in Sydney on Thursday he would vote "yes" but questioned why the government had announced the referendum now.
"They've announced a dopey wedge that's actually going to compromise our capacity to get up financial recognition of local government," he said.
"They're trying to create a distraction and this is why people don't like politicians and get so cynical."
Senator Joyce expressed concern that the government did not announce what the exact wording of the referendum would be and said he did not want the movement to fail.
"Referendums are absolutely so technically important you have to try and collect the trust of the Australian people."
Sydney Lord Mayor Clover Moore described the referendum as "necessary" but about a "non-contentious" change.
"This referendum is essential to ensure that the Commonwealth parliament has the power to provide direct financial assistance to local government," Ms Moore said in a statement.
"I call on all Australians to vote in support of their local communities and say 'yes' on 14 September 2013."
The Australian Local Government Association (ALGA) welcomed the government's commitment to recognise local councils in the constitution.
"As we have argued for many years, the only way to protect direct federal funding for community services and infrastructure is to have local government recognised in the Australian Constitution," President Felicity-ann Lewis said in a statement.
NSW Premier Barry O'Farrell said a yes vote in the referendum would change the relationship between local and state government.
"I don't support the referendum on local government, we've made clear to the federal government that we supported recognition of local government," Mr O'Farrell told reporters.
"Local government across Australia is set up by state parliaments, this ... recognition essentially changes the relationship."
He said Australia had a "history of referenda going down".
"I don't know that people are that excited about the recognition of local government," he said.
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