Federal Reform: Is Australia Overgoverned?

TONY ABBOTT’S PUSH to overhaul and modernise governance in Australia is welcome, and should be embraced by all sides of the political spectrum as well as stakeholder groups in the wider community. Abbott is right to include unpopular subjects (like taxation) as part of a broad and sweeping approach to simplifying public administration. Crucially, the question of whether there is too much government in Australia must also be confronted.

I want to talk very generally this morning, as public discussion of Prime Minister Tony Abbott’s quest to “fix” arrangements of governance in Australia begins to attract widespread coverage in the mainstream press, and as the initial indications that he is serious about developing a template to present to voters in 2016 appear more promising than the most recent attempt by a Prime Minister to do the same: notably, Kevin Rudd, whose own plans do enact similar reforms amounted to nought.

In case anyone thinks I am merely taking a partisan pot shot at Rudd, I note that the concept of “fixing” Federation is a question that, to date, has bedevilled every government and leader who has considered it; even the tax reforms of the Howard government at the end of the 1990s — which handed the states a residual growth tax in the form of the GST — appear a little dated, with spending by the states having since grown far beyond the capacity of the GST to keep pace, and the grotesque spectacle of Premiers trudging to Canberra with outstretched hands, which it was meant to end once and for all, seems more entrenched than ever.

I have been “holding on” to an article in my web browser for the past couple of weeks in readiness for beginning to talk about some of the reform items that must be considered; published in The Australian, I do think some of the findings it talks through — such as support for the creation of a fourth tier of government — are a bit ridiculous. But some of the trends and figures the article notes, from the biennial Constitutional Values Survey conducted by Newspoll, are telling.

This survey notes, among other things, support for the creation of new states, and potentially for a new tier of government — regional government — that makes me wonder whether there are a couple of discrete messages here that have become a bit intertwined in each other; after all, high trust in local government combined with high support to abolish it, at the same time as support for the creation of “regional government” and more states is being registered, would seem to send a conflicted message.

And whilst support to axe the states is said to have fallen, with a quarter of Newspoll’s respondents indicating support for such an action, it remains high.

It makes me wonder whether the “trust” in local government that this survey has picked up is really transferable to the potential tier of regional government: and were the states to be abolished, it is inevitable that a beefed-up version of the local tier would emerge, as frontline delivery of government services is increasingly devolved to local administrations.

So let’s as the blunt question about whether Australia is overgoverned or not, but in the obverse: aside from facilitating provincial rivalries and preserving a tangible colonial history that the world has arguably moved on from, do the states really serve any meaningful or constructive purpose in 21st century Australia?

The survey discussed in the article I have linked already shows clear support for federal government to pick up responsibility for the health system: a reform I think is well past due, especially with Medicare cemented as the centrepiece of public healthcare in Australia.

After all, the overwhelming bulk of public health money derives from the federal government; yet there are two distinct health bureaucracies — one federal, and one operated severally by the states — and this model, as is well-known and long lamented, throws up the duplication of resources (and the attendant wastage involved in transferring money between governments) that could be eliminated by consolidating them.

It surprises people who know me that for someone of conservative leanings, I am an enthusiastic advocate for abolishing the states as sovereign entities, a position that obviously places me at odds with Abbott’s desire to ensure the states are “sovereign in their own sphere.”

But aside from giving the Queenslanders something to fight about at State of Origin time each year, I really can’t see much point in retaining this anachronistic relic of colonial settlement in modern, 21st century Australia.

Certainly, there may be some practical applications for what were state boundaries that may be retained, and as we push further into consideration of reform in Australia over coming weeks, some of the ideas I have for these will become apparent (such as using state boundaries to apportion Senate representation, both to give effect to constitutional considerations around the structure of the upper house, and to help provide form for a decentralised two-tier model of government that I think is ideal for Australia, a population still only a bit more than a third of the size of Britain’s), and that would be far more efficient than often ramshackle arrangements that exist now.

What constructive or useful purpose is served, for example, in having eight disparate criminal codes across one country of 24 million people? Similarly, what use is eight separate education curriculums, operated by eight separate education bureaucracies, with the best resources in terms of planning, resourcing and administration split eight ways and often replicated eight times over? What point is there in having eight separate regimes for management of roads, the environment, urban transport, and so on?

Some will argue that this serves to facilitate “competition” between the states but in the end, who does this serve? I would suggest not the people who live in them, but rather the army of consultants, bureaucrats, PR hacks and other gravy train surfers who make their money out of playing different states off against each other for commercial favour, federal government largesse, and pushing paper between different levels of government for no other reason than to “process” money transfers that exist solely because of an outdated multi-layered structure that exists only because it always has.

And sometimes, this is the worst reason of all to persist with something: just because it has always existed doesn’t necessarily make it right, or the best option, or the most ideal way of doing things.

But really, what actual useful purpose is imbued in the retention of the states as sovereign entities? (I’m listening…).

I have advocated previously — and will do so again, as we move further in — that abolishing the states and moving to a two-tier structure of a central Commonwealth government consolidating essential functions of the kind we’ve alluded here, with responsibility for frontline service delivery being devolved to what could in fact be a system of regional governments, as identified by this survey: and largely ending, once and for all, the blame game/duplication/Canberra vs the states farce that consumes an unhealthy stipend of activity in Australia, both at the political level and where the public service is concerned.

My piece today is really only to start to get everyone talking about these things, which is why I am not going too deep on specifics for now.

But I would note that the costs involved in duplicating federal-state bureaucracies runs into the tens of billions of dollars; I haven’t seen any quantification of just how much this runs into, and to the best of my knowledge it hasn’t been seriously quantified. But the point is that aside from anything else, there is a colossal reserve of money locked up in needless paper-pushing that, if redirected to services, could unlock a tremendous new source of funding for hospitals, roads and urban infrastructure, and so forth.

One criticism I have heard many times is that the states should not be abolished because the loss of public service jobs would be far too steep to justify the move.

To this I make two points: one, that quite some proportion of these roles would disappear along with the states, but reappear in local and federal workforces that pick up the slack as bureaucracies are consolidated and streamlined; and two, whilst nobody likes the idea of unemployment, or arbitrarily adding to it, the notion that public servants should always be entitled to public service jobs because those jobs have always existed is a copout, and should be offensive to every taxpayer who helps pick up the tab for their wages.

Yes, there will always be a public service; such a calling is a noble one. But that service shouldn’t merely be bloated for the sake of it — especially if the elimination of duplication makes some roles redundant.

And anyway, cutting jobs out of the public service often sees additional employment appear in the private sector, as efficient bureaucracies invest more in goods and services rather than in bureaucratic functions: precisely this phenomenon occurred in Victoria under the Kennett government in the 1990s.

But in the big scheme of things, what would really be lost by eliminating state governments? And to those who argue for their retention, what functions — and be very specific — are so integral to the current model of state government that could not be performed by enhanced local/regional governments on the one hand, or transferred to the federal government on the other?

To me, local interests can easily be safeguarded by the ongoing local/regional tier; at the risk of seeming trite, this is why they are designated “local” in the first place.

As I said at the outset, today’s piece is really a conversation starter, and as ever I look forward to the discussion with and between readers. And as under the pump as I am at present, we will shortly begin to discuss some of the areas for reform I spelt out last week in greater detail, and in view of the Abbott push that now appears to be gathering pace, governance generally would seem the logical place to start.



3 thoughts on “Federal Reform: Is Australia Overgoverned?

  1. It wasn’t so long ago that Australia did not have a Federal Education Department. As they still do not control any schools or employ any teachers, so it should be again. The same with Health; no hospitals run by Canberra or doctors employed by Canberra yet they control Health. Back to the states for these two if you are serious about saving money and getting good value for money. Has anything of value ever come out of Canberra?
    Once you have done that you could get serious and consider some things like a flat 20% GST and allow individual States to set their own taxation rates enabling true competition between the States which would benefit the entire nation. I would completely remove local Government as their only function seems to be annoying people with ridiculous rates and crappy service.

  2. The states are here to stay so you may as well accept that. Better to concentrate on things which might be possible rather than the impossible.

  3. We need the States for the same reason the Founding Fathers created a Senate. The situation prevents rule of the Nation by a small region, and without States the numbers say that the Sydney, Melbourne, Canberra triangle run the place. It’s not like the Nation and Constitution of Australia was whipped up over a cuppa. The systems and Constitutions of the leading Democracies of the times were studied, their good points emulated and their bad ones avoided. (ie The American practice of adding “Riders” to spending Bills that causes great difficulty to them is specifically banned in Australia)

    So why did they keep the States? Accident? Perhaps simply clinging to some dogma or other? Doubtful. They were doing too much other stuff that went against “tradition”. These were clever boys who knew well the problems a nation would face if they screwed up. The American Civil War wasn’t long over, complete with the terrible lesson of what happens when State fights State with the weapons of modern war. The belt fed machine gun had replaced the Gatling gun and the Lee Enfield Mk1 .303 (a weapon far more accurate and deadly than anything used in the Civil War) had entered service in 1895. And that great disaster was less than 100 years after the Americans gained their independence. Yes, they were very well aware of the dangers the nation would face and the price that we would pay for their mistakes.

    The reason is quite simple. Emotion. We all like to think that we make decisions based on fact and reason, but we don’t. There are so many spin doctors in politics because people vote on emotion and not reason. Look at the “Save the Reef” campaigns against dredging in Qld. The Great Barrier Reef covers some 344,000 square km, but apparently dredging a couple of football fields worth of sand will threaten it. No States and the people of Melbourne and Sydney get to tell Townsville what “is best” for them. Sorry Yale, but most Victorians cannot even begin to comprehend the size of the big States. Do you really think it would be long before they would be complaining that Qld only has 1/4 the population but gets 4 times as much money for roads and rail?

    How long before the more populous centres demand division of resources based on population? For example, maybe 1 hospital per hundred thousand population? So Melbourne gets 43 and the Northern Territory gets 2. 43 in Melbourne packed into 2,700 square km and 43 to service the 1.7 million square km in Qld. But everybody’s getting “equal access”, right?

    It’s not hard to see that the money will follow the votes is it? Keep the voters in the triangle happy and the rest of the country doesn’t matter. That is the inevitable result of population and demographics.

    That is why we have States (one reason anyway) and that is why we have a Senate. (Ostensibly a “States House of Review”) to prevent the grave miscarriage of Democracy that pure numbers would bring. The tyranny of the more populous States over the lesser ones. Imagine the damage the Greens could do, voted in by the latte idiots in Sydney, Canberra and Melbourne so they hold the balance of power again and can shut down mining and other industries with no State governments to stop them.

    The men who devised our system were not perfect and they, with hindsight could have done some things better, but hindsight is the only 20/20 vision in politics and sociology. But they were canny buggers. Consider Sections 25 and 30 of the Constitution and what they meant in the fight for Universal Suffrage. They wrote into our founding document that if States allowed women and Aboriginals to vote, they would get more seats in Parliament due to the “larger” population. Universal suffrage, instead of being a dilution of power became a benefit to the various State governments.

    The bottom line here being. Before you decide to monkey with the basic fabric of our system of governance, you want to be extremely sure that it is broken beyond repair. Technology has changed but the forces that made the Senate mandatory still exist. I could argue that with the subversion of the Senate to a political toy, the only real defence the various States have left is their existence. Remove that existence and who will speak for the smaller States when the Senate won’t?

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