Money (That’s What The States Still Want)
It used to be called the Premiers’ Conference, and it was all about money. The Premiers attended, determined to screw as much cash out of the federal government as possible. When the Commonwealth took over income tax in 1942, they had no other real source of income.
The meetings were essentially a theatre. The Premiers left their states with a farewell press conference, promising to extract a great deal out of Canberra. On the night before the meeting, the Commonwealth would slide its offer under the hotel door.
In the morning, another series of press conferences, with each Premier deriding the meagre amount offered. When the meeting broke up, each Premier held yet another press conference, praising his or her magnificent effort in extracting a reasonable offer from the feds. End of another annual money carve-up.
In 1992, the Council of Australian Governments was inaugurated. It was enlarged from the old Conference to include the Prime Minister, six Premiers, two Chief Ministers, and one representative from Local Government. It was a sensible recognition that the federal structure had enlarged.
Since then, COAG has developed beyond the cash grab mentality. It is actually trying to reform the federal system. The process is exceedingly and frustratingly slow, but there has been some forward movement.
At least it is based on a realistic understanding of the problem. In 2007, when Kevin Rudd promised to “fix federalism”, the common reaction was to giggle. Getting Premiers to agree on anything is, as one bureaucrat told me, like herding snakes: they will not stay together, and they bite.
This tendency is on display over the Murray-Darling non-agreement. Different Premiers going in very different directions, based on the self-interest of each State. That kaleidoscope of views will probably have to be solved by the High Court, and no-one will be happy with the result.
Meanwhile, COAG goes quietly on, actually doing some positive things. Out of the meeting last week came agreement on skills training and funding for vocational education. A national disability insurance scheme has reached the level of agreement “in principle”, with promises of commonwealth funding.
There was a compact to cut red tape. But cutting green tape, the nine sets of environmental regulations which bedevil everyone, was blocked when Queensland and NSW decided they wanted to keep control. Back to the drawing board.
There was progress on an issue which is becoming more important as jobs move from some States to others. Industrial and employment regulations are still fragmented. COAG agreed to work towards a “seamless” system.
A related issue, producing uniform occupation health and safety laws ran into opposition from Victoria and NSW. Another try has been put off until 2014.
On the other hand, in a hang-over from the old Premiers’ Conferences, shares of money are still the biggest and most divisive issue. COAG ducked the question of who gets what share of the GST at this meeting, but the question will remain intensely divisive.
Some States are demanding that the billions of GST dollars, collected by the Commonwealth but belonging to the States, should be divided on a per capita basis. That sounds fair. The resource state of WA is emphatic about that, as it gets only a small proportion back of the GST extracted from its population back.
The Northern Territory nearly had a fit at the suggestion: it depends on a very high proportion of GST income, many times the proportion received by the States.
There has been progress in reforming federalism, but very slowly. Maybe COAG will be able to achieve the Rudd dream by the end of the century.
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