Prime Minister Julia Gillard has reaffirmed the importance of local government in offsetting the emerging "patchwork economy" in an address to the Australian Local Government Association’s (ALGA) National General Assembly.


Ms Gillard also reiterated her stance on the importance of local government in disaster recovery, saying that a close partnership between federal and local governments was necessary to implement initiatives that will foster economic growth and recovery.


The Prime Minister also said that local councils should no longer be considered as being purely responsible for roads, rates and rubbish but recognised as sophisticated partners working to deliver essential local services to communities across country.


According to this year's State of the Regions Report - commissioned by the Australian Local Government Association and prepared by National Economics - the current mining boom has generated economic extremes across the country and there is a risk that business confidence could evaporate in regions that depend on non-mining industries.


President of the Australian Local Government Association, Genia McCaffery agreed that the challenge in strengthening the economic performance of regional Australia lies in the Federal Government working closely with local governments to ensure effective investment in a range of services, education and infrastructure.


"The Prime Minister's address is a strong sign that the Australian Government recognises and values the role of local governments," Ms McCaffery said.


"The Prime Minister has witnessed local councils working on the ground to deliver halls, buildings and more than 6000 local projects under the National Building and Jobs Plan. In partnership with the Australian Government, they have worked to deliver better local services and infrastructure through programs such as the Roads to Recovery program and at times of emergency and crisis, the Prime Minister has witnessed our leadership and has worked with us to support communities through floods, fires and cyclones."


Ms McCaffery has also welcomed the Prime Minister's support to have the role of local government recognised in the Australian Constitution.


In coming to office, Prime Minister Julia Gillard agreed to a referendum on Constitutional recognition of local government by 2013.


The State of the Regions 2011-12 report can be ordered from the ALGA here