Allan Patience. Can We Continue to Afford Australia’s Federal System?

Australians are facing a gruelling 2016. A growing revenue crisis is placing severe constraints on the budget, meaning the government will probably be contemplating cuts in services and other “soft target” areas like pensions, child care subsidies and related welfare measures. The neo-liberal vandalizing of the country’s manufacturing sector, and the short-termism that is now a fixed feature of economic policy-making in Australia, mean that employment prospects are bleak, especially for school leavers and recent graduates. The consequences of climate change are becoming more apparent by the day as the country struggles through a summer of heat waves, droughts, floods, and bushfires. The cost of the country’s military involvements in the Middle East is mounting at a high rate. Maintaining the Manus Island and Nauru asylum seeker gulags is costing Australian taxpayers billions. China is no longer the cash cow it was during the squandered resources boom. Globally, the major capitalist economies continue to stagnate while burdened by debt levels greater than those preceding the 2008 global financial crisis. Meanwhile, since 2012 the Lowy Poll has been charting a growing dissatisfaction among voters with the country’s politicians and political institutions. This trend is particularly noticeable among 18-29 year-olds. The most recent Lowy Poll found that 37 percent of that age group believes that a non-democratic government could be preferable to the one we have at present.

All of these factors point to the need for a radical reappraisal of the country’s system of governance. A close, hard look at the Australian federal system should be at the top of that agenda. The forthcoming white paper on federalism is meant to come up with ideas for the “Reform of the Federation, and the responsibilities of different governments, [and to] clarify roles and responsibilities to ensure that, as far as possible, the States and Territories are sovereign in their own sphere.” This is a narrowly ideological approach to the extremely serious problems now besetting our ramshackle federation.

It is now more obvious than ever before that the nineteenth century compromises that resulted in the present federal arrangements are profoundly unsuited to the political challenges of the twenty-first century. What we have are separate representative governments in six states, two territories, and at the federal level. This is in addition to various forms of local government within the states. Critics of this absurd version of over-government have pointed to the expensive duplications, bureaucratic mazes, regulatory jungles, blame gaming, and inefficiencies these arrangements routinely foist on the people of Australia.

We can add to this inglorious list the rank incompetence of state governments, vividly on display when the Napthine government in Victoria signed a doomed contract to build an East-West link road system which has cost Victorian voters over a billion dollars, despite the project being abandoned. In addition state governments have the ugly reputation of being the most corrupt forms of government in Australia. If memories of the shenanigans of the Burke government in Western Australia or the Bjelke-Petersen government in Queensland are fading, consider the lurid revelations in 2015 about the antics of certain senior Education Department bureaucrats in Victoria.

The main defence of state governments has always been couched in terms of the democratic principle of subsidiarity. Put simply, this principal asserts that the best forms of government are those closest to the people. What the application of this principle fails to acknowledge is that no matter how “close” government is to the people, if the people are shut out of the policy decision making that affects their lives, if they are inadequately consulted (or even hoodwinked) during policy making (for example, on grounds of “commercial in confidence”), if they are denied avenues for genuine participation in the making of those decisions, then it is simply a political fiction – a big fat governance lie.

What we have to wake up to is the fact that representative government is not democratic government. At the beginning of the twentieth century the German political sociologist Robert Michels identified what he called the “iron law of oligarchy.” This notes that all emerging social democratic political parties and states contained within them the seeds of oligarchy – structures that would allow powerful minority groups to seize control of their organisations and ensure that their preferred candidates would keep that control intact for generations. The forms of representative government that developed throughout the twentieth century illustrate the veracity of Michels’ “iron law.” They are all governed by oligarchical, self-perpetuating elites. Their mainstream political parties also reflect exactly the same characteristics. Paramount among them is the determination to lock popular participation out of government decision-making. The oligarchs in the mainstream parties, in and out of government, and their bureaucrat, media, and business allies are impervious to the needs and opinions of ordinary citizens. In Australia this is especially evident at the levels of state governments.

Australia can no longer afford its tumbledown nineteenth century federal system of governance. Its myriad politicians, public servants and political parties are ridiculously expensive; they uniformly fail to deliver the essential public services needed by the mass of people excluded from the oligarchical minority for whom the system works to the disadvantage of all the rest.

So what is to be done?

We need to revive some of the regional thinking of the Whitlam years. Abolishing state governments has to be high on the constitutional reform agenda. Also high on the agenda should be their replacement with geographically and economically rational regional provincial assemblies. That these would be directly answerable to a more accountable central government should be also high on the agenda and vice versa – for example, by making the senior elected chairpersons from the regional assemblies members of a reformed Senate.

This must go hand in hand with a creative civics education program in schools and the wider community, to give people access to information and to develop structures that will enable them to participate effectively in making the policy decisions that affect their lives. The oligarchs will dismiss this as “populism” because the thing they fear most is losing their iron grip on the power levers in the Alice-in-Wonderland maze that is the Australian federal system.

The time is here to talk about getting rid of state governments and reviving the ideals of democracy in Australia’s stalled constitutional dreaming.


Allan Patience is a political scientist in the Asia Institute, University of Melbourne



Dr Allan Patience is a Principal Fellow in Political Science in the University of Melbourne where he lectures on Australian foreign policy.

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6 Responses to Allan Patience. Can We Continue to Afford Australia’s Federal System?

  1. Andrew Farran says:

    So you didn’t like my comment. Fair enough. It was a bit polemical and a bit immoderate.
    But we have serious issues here.
    In some respects Allan’s point about oligarchs could be equated with the ‘system’. Those who capture the system can then hold its stakeholders in thrawl which is why we to not have democracy. How many politicians are appalled by the govt’s flagrant abuses and disregard of international law with respect to refugees and asylum seekers; who are not free to speak out about climate change; are very concerned that a “captain’s pick” can deploy our armed forces into foreign wars, because they are captives of the ‘system’ – a system that is wide open to abuse. In other words we have a very immature political system. Is that what we want to leave to future generations?
    Something will have to give. Political party membership is tiny in proportion to the population. It is ripe for capture when circumstances change – as it will. But the ‘system’ is not ready for this. With what repercussions? The task is to improve the system.
    At the micro level I did instance the case of the Victorian govt blowing a billion dollars when local govt is at a real stretch to make ends meet, let alone money for development. The latter are caught up in processes out of reach at other levels, pointing to the system’s dysfunctional character.
    Disproportionality of another kind is the billions wasted in the defence vote when a few millions here and there would make a huge difference to communities. The point here is that there hasn’t been a coherent discussion about defence in the Parliament for decades if at all because of the system. These issues all point to the fact that our system as it is everyone’s responsibility which is no body’s responsibility so it is too easy to pass the buck.
    Perhaps Allan could use some specific examples that would give more substance to his interesting comment.

    Knock this back if you like.
    Andrew Farran

  2. Andrew Farran says:

    Re my comment
    11th last line, the first ‘many’ should of course be ‘money’.

    A footnote: in a State (Victoria) where rural local govt faces a financial crisis what can be said about financial rectitude when one billion dollars can be blown to make a political point?

  3. Andrew Farran says:

    Agree very much with your article Allan.
    The system is clearly dysfunctional but it suits the powers that be – the oligarchs. So only disaffection from the bottom will change it, triggered by some traumatic event. Example, an unpopular war brought about by the oligarchs.
    Meanwhile the relationship between State Govts and their subordinate local governments, at least here in Victoria, lacks rationality and is very inefficient. There is little or no coordination between programs generated by the State govt for local govt, and those generated by the Federal govt (some of the latter are unconstitutional anyway). The financing of local govt is unrelated to need, and now that rates are capped local govts has no effective autonomy and is having the buck passed to them without any many in many areas.
    On the other hand we cannot look to federal govts for quality policy as the political parties that pre-select are totally unrepresentative and they in turn are controlled by oligarchs – look at NSW.
    On the face,, wider regional provinces that displaced both State govts and local govts have an attraction but how would this work with the major cities which would still in effect dominate the regions? The issues would remain the same, and would the Fed Treasury allow the provinces much scope to determine their own finances?
    Frankly I cannot see much chance for substantive reform short of a major crisis that propels the energies of a disaffected youth that has given up on the system. That would be some sort of nemesis!
    Andrew Farran

  4. David Gray says:

    Well spoken, Allan! But where to start? Let us presume a federal structure of some kind. We need a non-partisan movement, a clear model and a great ground swell. We need your further ideas!
    Think out of the square. For example, when designing rationally-based regional assemblies, the boundaries of the “provinces” would change, depending upon the criteria. Is it possible to conceive of each voter being able to nominate several interest domains ( as his/her province) with which he or she identifies, and is registered as such, rather than being registered geographically. The voter would get a vote for each of those domains.
    Be bold! Proponents of change would also need to have a plan of campaign, by which the inertia and resistance would be most likely to be overcome. As the Reconciliation movement has shown, a minimalist model of change is not necessarily more achievable than something more root-and-branch.
    The measure of a democracy is its ability for enlightened change, not its capacity to cling to the structures (including the Constitution) of the past, established by an interested fairly elite group, and which a current elite has learned to manipulate for maintaining its relative position.

  5. Alan says:

    The inherently incompetent Victorian government was aided and abetted in the East0West Link disaster by the inherently competent Federal government. Moreover, federalism is a run down nineteenth century system if and only if unitary states are more common than federations. The reality is 1. that democracies with distances like Australia are all federations and 2. even Britain and France, the type case for the unitary states are themselves devolving authority to subcentral governments, so much so that Britain now has to be regarded as a case of asymmetric federalism.

    It may not be an entirely non-trivial fact that the 8 of the10 largest democracies in terms of land area are federations or multilevel governments.

    • Allan Patience says:

      It does not follow that because there are more federal governments than unitary states that federal states are any better. It is also important not to confuse the system of representative government with democracy. In the age of the internet, et travel, etc., the tyranny of distance is no longer a justification for the kind of ramshackle federal arrangements we have in Australia. Britain and France are not devolving power; they are states struggling with two crises – internal disintegration and the pressures of globalisation. Both crises flow from their being the results of “the iron law of oligarchy” – they are increasingly undemocratic states, excluding citizens from the decision making processes and alienating voters. As for the “inherently competent Federal government” – well, what can I say?

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