National Cabinet to replace COAG: Part 2 of 2.

Part 1 of this article yesterday discussed the reasons why National Cabinet has been successful so far. Today, Part 2 will discuss how replacing COAG seek to define the future mandate of the National Cabinet and its revamped ministerial committees, and what are the chances of these new arrangement being any more successful than the previous Council of Australian Governments (COAG).

The new arrangements and why

Since WWII, when the Commonwealth gained sole control of income tax revenue, the national government has steadily increased its involvement in the provision of government services that were originally the preserve of the states. This has required the establishment of various ministerial committees to coordinate the actions of both levels of government in providing each service.

Morrison does not seek to change this fundamental feature of the present Federal-State relations and accompanying administration by ministerial committees. However, his complaint is that there are too many committees and that they “do it in such a bureaucratic form with a whole bunch of paperwork attached to it”. Morrison says that he wants to simplify the present process so that ministers ‘come together to solve problems, deal with issues and move on”. In future the ministerial committees will be “pursuing the tasks that National Cabinet has set them to create jobs in our economy”.

In addition, under the new arrangements the Council of Federal Financial Relations (basically a meeting of Treasurers) “will take responsibility for all of the funding agreements between the states and the Commonwealth. They will no longer be the province and domain of individual ministerial portfolios”.

Problems with the new arrangements

As I see it there are a number of potential problems with the new arrangements for ministerial councils that will be discussed below.

The purpose of ministerial councils

As noted, according to Morrison the principal purpose of a ministerial council in future will be “to create jobs in our economy”. But is this really what ministerial councils are there for?

Up until now, the focus of ministerial councils has been, or should have been, on:

· Considering the adequacy of service provision, identifying any gaps and how best to resolve them.

· Coordinating the activities of each level of government to improve service delivery.

· Ensuring value for money by considering how to improve the cost-effectiveness of each service.

· Agree on the respective funding responsibilities to achieve the above objectives for service provision.

It is difficult to see how these essential functions of ministerial committees relate to jobs unless Morrison wants to encourage some feather bedding in service provision. Once again this looks like another example of Morrison sloganizing, and does not really represent a considered policy.

The role of expert advice

Morrison wants ministers to talk to each other at ministerial councils, but he complains about the “whole bunch of paperwork attached to it”.

But for much of the time, although not always, ministers representing their government in negotiations need to be fully and properly briefed. Also the ministerial council meetings are usually more productive if the details have been sorted by officials in advance, clearly identifying the key issues that only ministers have the authority to resolve.

Clearly these officials’ discussions to prepare each ministerial council meeting can only work if they are conducted by officials from the relevant subject matter departments who are expert in their field. Furthermore, the officials will usually keep their minister informed of the discussions as they proceed, so that they are not acting without ministerial authority.

But Morrison is on record as saying that he sees no role for public servants in the development of policy advice. Instead their sole role is the implementation of policies developed by ministers. Thus it comes as no surprise that Morrison has reverted to his basic instincts and seeks to limit ministerial councils’ discussions to off-the-top of the head ideas of ministers without any expert input or prior consideration.

The role of Treasury officials

Morrison has now decided that treasurers will take responsibility for all funding agreements and that “these will no longer be the province and domain of individual ministerial portfolios”. Again however this is likely to create problems.

First, many program improvements which the Commonwealth wants are often only agreed after bargaining over who will pay and how much. Of course, the Commonwealth minister cannot presently agree to any such extra funding without clearing it with the Finance Minister (not the Treasurer) in advance. But the responsible Commonwealth minister cannot realistically do her/his job without authority to negotiate various possible trade-offs with their state counterparts, and those trade-offs typically include negotiations over money.

Second, Treasury officials have no expertise in the subject matter of service delivery. Indeed, the Department of Finance, and not the Treasury, is the central agency responsible for assessing and advising on all departmental expenditure programs, including the specific purpose payments to the states to pay for these services. So the Treasurer will be making judgements about future program funding without any expert advice.

Conclusion

Once again Morrison appears to have succumbed to the temptation to substitute a gimmick of  change for substance. There is no reason to think that the new arrangements for the national cabinet and its revised ministerial committees will work any better than the previous arrangement built around COAG. Indeed, there is every risk that the new arrangements will lead to worse policy development in the future.

What is needed for better Federal-State relations is better leadership built around a clear idea of what that leader wants to achieve, and the ability to achieve the necessary consensus. But to be convincing that leadership must take advantage of expert advice.

As things stand, it is difficult to see Morrison’s administrative changes to Federal-State relations as being any more than shifting the deck chairs, and as we all know that didn’t save the Titanic.

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Michael Keating is a former Secretary of the Departments of Prime Minister and Cabinet, Finance and Employment, and Industrial Relations.  He is presently a visiting fellow at the Australian National University. 

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