Whither the Australian federation

Mar 22, 2022
Australian map with the state flags
States have started to claim greater prominence in the decisions governing the future of Australia. Image: Wikimedia Commons

In the absence of Commonwealth leadership, our federation is not working well. That comes at a cost to good government, and is impeding service delivery and any future reform agenda.

Since Scott Morrison became Prime Minister the Australian Government has sat back and been extraordinarily tardy in its response to national disasters. Inevitably the States have increasingly found that they have had to take the lead.

Thus, in response to the Covid pandemic, it was the State governments that at the outset took over responsibility for quarantine – a clear constitutional responsibility of the Commonwealth – and the States organised the vaccination of the population, and tracking and tracing the spread of the virus. Most recently, the Commonwealth has also fallen down in responding to the floods in Queensland and NSW.

Perhaps not surprisingly therefore the States have started to assert themselves more and claim greater prominence in the decisions governing the future of Australia. After all, there is an old adage that politics abhors a vacuum, and the Morrison Government has certainly created a policy vacuum at the Federal level.

The obvious question is how much if anything does this shift in policy-making power back to the States matter, if at all?

Conservatives have long argued that it is the States that have the constitutional responsibility for the provision of most government services, and that the Commonwealth has intruded on this responsibility using its taxation powers. Equally, many non-conservatives are pleased that the States have taken the lead in areas such as reducing carbon emissions if the only alternative was to leave it to the do-nothing Morrison Government.

Nevertheless, there are very good reasons why all Australian governments, prior to the Morrison Government, had accepted that Australia is one nation. Consequently, the Australian government should take the lead in developing policies that affect Australia as a whole.

First, and foremost, Australia is one national economy – not eight separate economies in each of the six states and two territories. Indeed, that was a key intention of the original federation, with the constitution specifying that the movement of people, goods and services, and finance between the states should be absolutely free.

As a result, Australia is now a totally integrated economy. We properly expect the Australian Government to take responsibility for the performance of the Australian economy as defined by the rate of economic growth, inflation, unemployment and its overall financial stability.

Second, for many years it has been accepted that all Australians should enjoy the same access to essential services at much the same cost. That is what helps define being an Australian citizen.

For example, that is why for almost one hundred years, the distribution of Commonwealth general revenue payments to the States is not based on equal per capita funding, but instead this distribution is adjusted to allow equality of service provision across all states. It is also why the Commonwealth has got involved in the financing of key government services, such as health and education, and where much of the service provision is by the private or not-for-profit sectors.

In addition, the Commonwealth cannot expect to meet its responsibility for national economic growth without ensuring the adequate provision of key government services, such as infrastructure and education and research.

In sum, for very good reasons, our federation will only work well if it is accepted that the responsibilities of governments for service provision are often shared and cannot be usefully separated.

That sharing of responsibility typically works best if there is joint or negotiated decision-making, with responsibility for the detailed service delivery devolved to those who are closest to the clients. But the policy framework should be set by the Australian government taking the lead. That is the best and only way to ensure a genuine uniformity of entitlements for essential services for all Australian citizens.

But under the Morrison Government our federation has not worked well. Morrison has continually failed to provide a lead, and as State leaders have remarked, the so-called national cabinet has outlived any usefulness.

In particular, it will be impossible to pursue any serious future reform agenda if the Australian Government does not take the lead and then restores much better working relations with the States and Territories to thrash out the details. But don’t hold your breath if the Morrison Government is re-elected.

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