Abolish the States


In my first speech to Federal Parliament in 1993, I advocated the abolition of State Governments:

The States are an impediment to good government, a fount of economic inefficiency, and a misallocation of scarce public funds. If we are to be a truly independent nation, economically vibrant and innovative, and to provide efficient and responsive government to the people of Australia into the 21st century, we must not exempt our antiquated system of government from the flood of change which is sweeping through this country.

I said this without much expectation that such a change would happen quickly, but a clear recognition that it will happen. And much as I anticipated, the significance of State Governments has continued to erode over the ensuing 12 years.

Bit by bit, as Australia’s economy and society continue to outgrow our colonial origins, the States are shrinking in scope and significance. Uniform national regulatory schemes in areas as diverse as road rules, competition regulation and defamation laws are slowly reducing the individuality of State regulation. Economic realities are eroding the ability of particular States to run radically different tax regimes from their neighbours. State industrial relations systems are about to be swallowed by a national scheme.

Thanks to Bill Leak

The dominance of the Labor Party at the State level has accelerated this trend. The conservatives have happily abandoned decades of devotion to States’
rights, and used their control of the Federal Government to impose an unprecedented level of national interference and regimentation upon the States.

Since the departure in 1999 of Jeff Kennett as Liberal Premier of Victoria, it is getting harder and harder to discern serious ideological differences in State politics. This is partly a function of a prolonged period of benign economic circumstances, but it also reflects the inexorable narrowing of the scope and reach of State politics. The Western Australian election earlier this year was a very good example of this. An opposition party with a bold, visionary infrastructure scheme messed up its figures, and failed to unseat a cautious, fiscally conservative, incumbent government. Which one was Labor and which Liberal?

Labor people like me celebrate the passing of the States’ rights mantra. It was always about defending privilege from reforming national Labor governments, and as soon as the roles were reversed, it was very quickly abandoned by the conservatives. The demise of States’ rights opens up the prospect of a broader national debate about the future structure of government in Australia.

Globalisation has radically changed the wider social and economic context within which Australian governments function. Right across the realm of government, major anomalies and inefficiencies that were inconsequential years ago are now crying out for resolution.

Rather than constructively tackling these problems, the Howard Government is making them worse. By creating Federal technical colleges, gratuitously interfering in State Government administration of schools, misusing road funding for political purposes, overriding State industrial relations systems, and intervening in State infrastructure processes, the Howard Government is seeking to maximise short-term political advantage at the expense of long-term solutions.

Achieving constructive reform will not be easy, because different interests carry different political weight across the country, and parochial attitudes vary in intensity. Nevertheless, the task is so important that it cannot be avoided.

We should start with some core principles. I’d suggest the following:

¢ uniform national regulatory regimes to be negotiated across all appropriate areas, reflecting the National Transport Commission model;

¢ the Commonwealth acts primarily as funder, and the States as service deliverers;

¢ regular funding of mainstream functions to come from one level of government only;

¢ service delivery decisions, like the content of school reports in government schools and local road funding decisions, to be left to the States;

¢ interfaces between State and Federal Governments which produce anomalies and inefficiencies, such as young people in nursing homes and hospital versus medical services, to be renegotiated;

¢ in renegotiating funding responsibilities, overall outcomes should be fiscally neutral in the long-term, taking into account the impact of demographic change on specific funding responsibilities;

¢ formal recognition of local government as a vital part of the States’ service delivery mechanism;

¢ stronger commitment to eliminate secret payments to companies to influence location decisions.

Little progress will be made without good will and serious effort on all sides. The Howard Government is displaying very little of either. As the most short-termist, cynical government in Australia’s history, it is unrealistic to expect anything substantial from the current Government. The temptation to play politics, blame the States for everything, and gratuitously interfere whenever it is politically useful, is just too great.

The ageing of Australia’s population is going to put a lot of pressure on government services. If we are to avoid the unpalatable options of higher taxes and poorer services, more efficient government is our only option.

Whether it’s getting severely disabled young people out of nursing homes, fixing our ramshackle injury compensation arrangements, creating clear lines of accountability in our health system, ensuring road funding decisions based on need, or eliminating Federal Government interference in our schools, there are too many vital issues that depend on resolving these problems.

The Federal system in Australia is a shambles. While some voters are prepared to pay a price to ensure that their parochial interests are protected, the price we are all paying is out of control. Reform will be hard, but prolonged further inaction will be very expensive.

It’s time we set about the task.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.