Standing up for Federalism in the Federal Parliament has never been a particularly popular activity. It was even less popular in recent years in the Parliamentary Liberal Party when Liberals controlled the Federal Government and every state and territory was being mismanaged by the Labor Party.

Imagine if he controlled the whole lot! Illustration: Warren Brown

It’s understandable when you are part of a successful Federal Government, and witness daily examples of failures by your political opponents at a State level, to think the answer is to simply shift responsibility from State level to Federal level. And there have undoubtedly been serial failures by State Labor administrations in the areas of health, education and infrastructure.

But is centralism the answer?

Is there something inherently wrong with the structure of our political system that demands a radical change. Or is the failure of state governments simply a reflection of the political party in charge.

Consider this: there have been many successful state governments who have balanced budgets, delivered services and governed free of corruption. Victoria had a highly successful government led by Jeff Kennett and Alan Stockdale. NSW had the Greiner and Fahey Governments. In WA, Richard Court replaced the floundering Labor governments led by Burke, Dowding and Lawrence.  In fact, throughout the 1990s many states benefited from energetic and reformist state governments. And they all had one thing in common – they were led by Liberals.

During the early part of the 1990s, there were few calls by Liberals to shift power to the federal government. It makes sense, given the transfer of power would have been from competent state Liberals to a tired and ailing Federal Labor Government run by Paul Keating.

Liberals should apply a similarly cautious approach to the issue now. Do we really think that a Federal Government that has overseen Grocery Watch, Fuel Watch, the bungled bank-deposit guarantee and record levels of debt and irresponsible spending is the best level of government to control our health or education systems?

The principles of Federalism are timeless. Liberals believe in the principle of subsidiarity: that power, where possible, should be located as close as possible to the people so that it is responsive to their demands. Liberals are wary of concentrating power in the hands of a small number of people. Liberals also believe in checks and balances – abolishing or rendering state governments impotent would leave a federal administration’s power virtually unchallenged.

Liberals also believe in competition. States competing for jobs, investment and talent should lead to lower taxes, lighter regulations and more attractive communities to live in.

Proposals to shift power to the federal government are short sighted. Just because there are governments at a state level that are failing in their duties doesn’t mean the federal system is broken. What it means is that many states are run by incompetent governments. Arguing that the reason NSW Hospitals are in a mess is because of federalism gives the NSW ALP a free-pass they do not deserve.

State Labor governments have benefited from record Commonwealth funding and a booming economy. Competent administrators should have been able to deliver services and balance budgets.  What the people of NSW and Victoria need is a new government, led by Liberals, not a federal takeover of areas of state responsibility.

Liberals should always be sceptical of measures to centralise power in Canberra. There is nothing inherently special about a bureaucrat living in Canberra compared to one living in our state capitals, and there is no reason to think they would administer any more competently. The Liberal Party needs to confront the real reason for failures at a state level: bad governments led by our political opponents.

There is a simple solution to this problem which requires no constitutional changes: turf out the Labor Party via the ballot box and replace them with competent Liberals.

33 comments

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    • buddy franklin says:

      06:36am | 04/09/09

      Hmmm….Naaa, Scrap em.

    • Rationalist says:

      08:21am | 04/09/09

      The notion of scrapping the states is a joke, mainly put forward by incompetents of the constitutional system on talk back radio.

      Firstly it cannot be done without each state legislature ratifying their own destruction, also it puts many constitutional provisions up in the air which would no doubt require a referendum (which are notoriously difficult to pass YES in Australia).

      Secondly, as Mitch says, elections can solve the problem of old and stale governments. It worked in 2007 Federally and it will work in 2011 in NSW.

    • iansand says:

      09:42am | 04/09/09

      Then again we have duplicated bureaucracies and the absurdity of duck shoving and blame shifting epitomised by health and education…

    • Rationalist says:

      09:53am | 04/09/09

      ian, that is partially the result of the vertical fiscal imbalance we have. This has been worsened by the structure of the GST. Perhaps a federal and state income tax? Cut all of the federal rates by 5%, get a consensus on a 5% state rate. State governments can then run on tax cuts/tax increases at the next election and the amount of taxes/services by state governments are governed by how much income they receive.

    • Margaret Gray says:

      09:54am | 04/09/09

      Last time I looked there were THREE levels of government in Australia.

      Please explain why this is necessary with needless duplication across many functions and services.

      The public service makes up almost 30% of Australia’s workforce.

      An unprecedented number and waaaaay out of line with other western countries.

      One level of this inert bureaucratic morass should go.

      I vote State.

    • Rationalist says:

      10:08am | 04/09/09

      Margaret, prove it.

    • Gibbot says:

      10:16am | 04/09/09

      HAHAHAHA @Rationalist.

      Gold.

    • Margaret Gray says:

      10:19am | 04/09/09

      09:08am is a bit early to be dealing with The Stupids.

      Which one of the three do you work for?

    • pete says:

      10:23am | 04/09/09

      Liberals support competition? No, the Liberals laid the solid groundwork for Labor to continue the serious erosion of competition and any pretence of a ‘free’ market.  Just as Labor continued the Liberals: rascist Aboriginal intervention policies, pointless ‘Vietnam’ wars; ineptitude on national disasters like the Murray-Darling; and continuing anti-democratic Howard-like policies for terrorism, war on bikies, net censorship, disrespect of civil rights etc. Where’s the political diversity, the choice, the imagination in re-marketing ‘opponents’ incompetence and calling it ‘reform’ or ‘change’?  It’s a Coles vs Woolies argument: The entire dual-power, inbred-system needs radically rethinking.

    • Jake the Muss says:

      10:35am | 04/09/09

      Margaret:  I vote Federal.

      Federalism and decentralisation but the whole ‘ooh ooh record winfalls through GST’ line is a favoured Liberal misdirection.

      Fix VFI.  If you believe in decentralising power, decentralise revenue. 

      As a Liberal Senator, perhaps Mitch you could show real leadership on this issue by owning up for all the centralising actions of the Howard Government, many of which you voted for.

      http://www.pimpinforfreedom.wordpress.com

    • Micko says:

      10:47am | 04/09/09

      Boring boring boring…there is nothing drearier than politicians spruiking the magnificence of their own party and the malfeasance of the other side.  I might as well go to the parliamentary website and read Hansard…or watch question time.

      I was lulled into clicking onto it in the expectation that this might be a thoughtful article rather than a load of partisan drivel.

      Punch—sort it out—ditch the pollies!

    • DG says:

      10:59am | 04/09/09

      @Margaret: If we compare the functions of the three tiers of Government I think it is fair to say that the Local Council does not, in any meaningful way, operate as a Government.

      To suggest that the local government is more than a Government Department with elected representatives is to ignore the reality that the majority of a council’s functions involve the administration of State planning and environmental law and the provision of basic services such as waste collection.

      If we can afford to lose any level of Government it is Local - the same administrative functions could be performed by regional divisions of the Department of Planning, while the resources allocated to council rangers and the likes could be redirected to Police.

      The regional divisions could carry out planning assessments (which are made in accordance with the Environmental Planning law of the State as well as State Environmental Planning Policies and Local Environmental Plans made by the STATE Minister for Planning) and make arrangements for waste disposal, stormwater management and the maintenance of local infrastructure in their respective regions by tendering to private contractors (by doing so you would achieve your desired result of shrinking the public service and creating private jobs).

      These services can be provided without the input of elected officials, the ‘best tender’ should be accepted in each case and is administrative rather than policy driven. Unlike the State which makes the planning, criminal and environmental laws of the state which are political/policy matters - and should reflect the will of the electorate.

      As such the Local Council is, to some degree, expendable - if nothing else we would save on holding local elections.

    • John says:

      11:35am | 04/09/09

      Rudd must be bursting at the seams w/ pressure to deliver significant results. Even though we made it through the GFC, it was partly due to the fact we had money from the last government to spend and the fact that unemployment and icrease in taxes are going to be the norm to keep this government afloat it explains why Kev has nothing to gloat about.

    • Allan says:

      11:49am | 04/09/09

      At the moment we have City States.
      Sydney controls NSW but is mainly interest what happens within 100km of Macquarie St.
      Why would the NSW Govt want to jam more people into Sydney with all its transportation/ infrastructure problems rather than decentralise by growing Coffs Harbour and Bega for example?
      Because two thirds of the parliamentarians come from Sydney.
      The rest of the state is just grist for Sydney’s mill.
      The policies implemented by the NSW Govt are framed for the needs of Sydney’s residents ignoring the diversesity of needs in the rest of the state.
      As a resident of rural NSW I find the remoteness of the Sydney Govt a greater burden than that of the Federal Govt.

      Cairns feels no connection to Brisbane and Broome none with Perth.
      We should have more regional representation and delivery of services.
      The Federal Govt would be the developer and maintainer of standards along with the collection of taxes and the regional governments would provide the services as decided by locals.
      The current system only enlarges the six existing cities at the expense of their hinterland states.

    • PB says:

      11:52am | 04/09/09

      “Liberals believe…that power… should be located as close as possible to the people so that it is responsive to their demands.”

      Right… like the federal takeover of the Tasmanian health system in Northwest Tasmania just before the last election…

      You guys don’t have a lot of credibility here. You say one thing but do another.

      Micko is right. Ditch the pollies or at least put a big disclaimer at the top of the article stating they are a politician and their affiliation. (Actually there’s no need for affiliation is there? As far as I can see they’ve always been Libs.)

    • AJ says:

      12:24pm | 04/09/09

      Senator,

      Congratulations on dumbing down a debate about Federalism to ‘Labor bad, Liberals good’.  If there had been some analysis about how Federalism should work independent of the blind hatred you feel towards the Labor Party, perhaps this would be a credible article.

    • Lord Grognard says:

      12:28pm | 04/09/09

      The only thing more incompetent then a State Labour Government is their Liberal Opposition.

    • Daniel P says:

      12:35pm | 04/09/09

      Hear Hear Mitch.
      Conservatism that is anti-federalist is no conservatism at all, it is more a socialist dreamland.
      As much power as possible should be devolved from the Feds to the states, and then as much as possible from States to Local govt.
      Federalism should lead to true competition between the states when it comes to taxation and regulation. Unfortunately Labor’s all-state consensus system has in effect led to a cartel of states agreeing to increase regulation with no genuine competition allowed. Let’s hope WA changes this.

      Feds should just be responsible for national security, immigration, and not a whole lot else.
      States should have full say on education, health, social welfare, infrastructure
      Local govt should be able to control its own planning, primary schools, local policing, local health centres.

    • Margaret Gray says:

      12:43pm | 04/09/09

      “...The only thing more incompetent then a State Labour Government is their Liberal Opposition…”

      Can you tell me which State has a Labour government?

    • miles says:

      01:08pm | 04/09/09

      mitch, i think you are confusing ‘Liberals’ with ‘liberals’.
      liberals believe in the decentralisation and reduction of government power
      Liberals, if the last 12 years are anything to go by, believe in putting government power in the hands of one man
      unfortunately both models - liberal and Liberal - tend to put power in the hands of those with money ie. big business…or malcolm turnbull

    • Susan says:

      01:20pm | 04/09/09

      This is the worst partisan piece I’ve read on The Punch yet.

      Your entire argument is that any Labor government is by definition bad, and any Liberal government is by definition good. Similarly, you use the same gutless rationale of Ms Mirabella last week about child care - oh it’s all too hard so let’s do nothing.

      The problem is we are over-governed, and there is duplicity across levels of government that create serious inefficiencies. For example, both Federal and State Health undertake awareness and preventative health campaigns, and both levels provide funding for schools. Even the First Home Owners Grant involves duplicity, paid by the Federal Government, but you apply through the State revenue office (set up that way by Liberals, by the way).

      State Governments get most of their revenue from the Federally collected GST that is passed down the line, and function as an administrative arm of the federal system in many ways. Why not formalise this?

      In the ACT, we have a government that performs all the state and local council functions that are seen in the states, and we are doing a damn sight better than NSW.

      Abolish the states, pass things like local main road infrastructure and planning down to local councils, have all of health and education administered federally, develop a national police force that increases the scope to move resources across state borders to wherever they may be needed most, integrate services, save money. We win on costs, efficiency and simplicity.

      The only people who lose are politicians; with less seats to go around and a given pool of real talent to get first dibs, it means the talentless hacks won’t get as many jobs and we will have a better overall representation. Which is another win for the people.

    • miles says:

      01:24pm | 04/09/09

      allan, this is so true
      and if you do take brisbane as an example, the city tends to have one of the more functional local governments in australia…and propogates its ideas and systems throughout the state
      expanded local governments would find themselves so much more efficient and effective if they shared bureaucracy, ideas and legislation
      ...sort of a localised, rather than local, government

    • Cameron says:

      02:27pm | 04/09/09

      Spot on Micko.

      Punch (and Mitch), can we please have opinion pieces which aren’t littered with petty, adversarial swipes at opposition parties?

    • Amber Dekstris says:

      03:00pm | 04/09/09

      Can the editors please remove all party-political sentiments from articles? The Punch has some interesting reading but it is ruined by politicking. Thanks.

    • Annie says:

      03:06pm | 04/09/09

      If we abolish State governments, we will just have the same people doing the same work for a Federal government.  It will not reduce public service numbers.  In theory it would reduce the number of politicians.  However, I am not sure that this would necessarily be positive as we would have less ability to apply pressure.

    • Mr Subramanian says:

      03:16pm | 04/09/09

      I’m fine with pollies expressing their opinions on non-political issues. Or being brave enough to say something differerent to “the party line” on any issue. When it’s just regurgitating said line, the only people you’re appealing to are already voting for you - everyone else thinks you’re a tosspot.

      This article would have had a lot more credibility if you’d been writing it when John Howard was in power.

    • Ben says:

      04:12pm | 04/09/09

      State Governments should be scrapped as they waste all the GST money and do not provide any of the services.

      Here is solution: 20% flat income tax; 25% GST; scrap all business and state taxes - business alone will re-emply the public service that are displaced.

      All politicians must do 10 years private sector work ......not unions, party, council, thinktank…....work for someone before entering parliament. Also be financially secure so not sponging off public purse. Scrap parliamentary super scheme - only those opposing it will be those in politics for wrong reasons.

      Health, education, water, rail ......all standardised.

      National ID card for driver licence, medicare, social security - efficiencies everywhere.

    • Kaff says:

      04:35pm | 04/09/09

      Federalism or decentralisation of power has a lot of merit if you need to base decisions on the needs of people within a smaller defined geographic area.  Planning is a case in point.  Provision of day to day services is another.  Centralism is great for small defined areas or for setting the key requirements of the system: ie common school starting and leaving age, key curriculum outcomes at each level of schooling, standard qualifications for licensing, a national system of industrial relations, corporate law etc.

      A sensible article would have looked at whether federalism should mean states or regions (amalgamating state and local functions) and who should really look after what.  Not an article which is centralism is good when I’m in power federally because Labor are incompetent and centralism is bad when Labor is in power because they’re incompetent and we may have less incompetent State Liberal Governments.  OK, we get it.  You cheer for your own team.  But that’s not the point.

      Centralism has been going on since WW2 - and has had its spikes at times under Menzies, Whitlam and Howard.  Sometimes the Federal Government wants to do something that the States aren’t doing well enough - Whitlam’s development of outer suburbs springs to mind.  Sometimes the States actually agree that having a national system is a good thing - Corporations Law for one, defamation law for another; not because one side is in power, but because it makes sense.  Sometimes you have the situation where a Premier will hand over power to the Federal Government voluntarily - Kennett handed over Victoria’s industrial relations powers to Howard in 1996 or 1997 - but another Liberal Premier at that time did not - Richard Court in WA maintained their State’s powers.

      I’d prefer to have your views, Senator, on whether a national curriculum is a desirable thing no matter who’s in power; whether a national system of industrial relations is a good or bad thing no matter who’s in power; and what exactly should the Federal and States’ (or regions or whatevers) role in the Health system should be.  That would be a genuine contribution to good governance and policy debate.  Not just schoolyard jeering.

    • NNick says:

      09:00pm | 04/09/09

      I think I’ll stay off the Punch during election time if there is this much partinsanity outside of it.

    • HelĂ©na says:

      11:15pm | 04/09/09

      I’m all for federalism! - less expense,  less taxes, and less buckpassing,
      easier to see who needs lynching wink

    • Alan says:

      11:17pm | 04/09/09

      @Micko
      I agree! This isn’t so much an article about rethinking federalism at all, but rather just a liberal = good, labor = bad diatribe. And it isn’t even very good at making that point.

    • Formersnag says:

      04:45pm | 05/09/09

      Abolishing the states has nothing to do with centralising power in Canberra and everything to do with decentralising power to local government.

    • Charlie says:

      01:48am | 07/09/09

      I say scrap the states and why we’re at it get rid of the Federal Senate and it’s unrepresentative swill incumbents.

 

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