By far the biggest political stoush in Queensland this year has been local government reform.

Moves to radically reduce the number of councils have seen Deputy Opposition Leader Fiona Simpson suspended from the House for orchestrating a bizarre protest with red bras tied to Parliament’s fence and Deputy Premier Anna Bligh trading rhetorical blows with Nats Leader Jeff Seeney over allegations that protesters had dishonoured an Anzac monument.

The angst, which saw Peter Beattie howled down in Labor’s birthplace Barcaldine on Monday, is now spilling over to the federal arena.

Local Government Minister Andrew Fraser established a commission, which included a former Nationals Minister, to recommend amalgamation of non-metropolitan Councils, many of whose boundaries had not been adjusted since 1909.

The commission has now recommended reducing the number of councils from 156 to 72. Fraser says the reform is all about ensuring financial viability and the ability to provide much needed infrastructure.

The policy has created angst all over the state, from the rural West to Brisbane’s northerly neighbour Redcliffe. The akubra hat brigade have been joined in protest by Noosa’s greenies who feel their anti-development shire will lose its exclusivity within a Sunshine Coast regional council.

Beattie this week over-ruled the recommendations of the Commission for council-wide elections, insisting that councils be able to be divided into wards so that smaller population centres are not swamped.

The politics of this issue are fascinating. Beattie’s government has been accused of taking the axe to Nationals powerbases in local government. The same accusations were made some years ago when Councillors were prevented from simultaneously holding state seats.

It would be surprising if this wasn’t an element in Labor’s calculations, but it has also enabled Beattie to paint the protests as self-interest from Mayors and Councillors affected.

Other critics like Democrats Senator Andrew Bartlett have attacked the process as deeply undemocratic.

At first glance, this policy would appear to be the sort of modernising reform Kevin Rudd would embrace with open arms. But Labor likes its chances in some regional federal seats – such as the new electorate of Flynn. Rudd has placed ads in local papers opposing the move, an action which spawned fury from Peter Beattie.

There’s no doubt that federal Labor would have liked this whole issue to be placed on the backburner, but Beattie has a point when he argues that the changes have to be in place for the next round of local government elections in March next year. (Queensland local government runs on fixed four-year terms.)

Behind many of the concerns expressed is fear that further services will be lost from the bush (which has been strongly denied by Beattie). Just as in Victoria with the Kennett amalgamations in the 90s, this issue is a lightning rod for all manner of rural and regional discontent, which might otherwise have been funnelled towards the federal Coalition government.

Rudd is no doubt hoping the Kennett experience is not an omen.