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The Forum > Article Comments > Australia’s federal structure is no longer appropriate > Comments

Australia’s federal structure is no longer appropriate : Comments

By John August and Klaas Woldring, published 1/5/2007

It is time for a long overdue debate on how Australia can now move to a two-tier system of government.

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Perseus, could we recommend that you read the article carefully. We do believe that metropolitan/large city governments should be part of the second tier. We aim at a better system of decentralisation. The current federal system has clearly failed in that respect.

Some other commentators also tend to see federation as a kind of insurance against centralism. They approach the subject from an anti-labour perspective thinking somehow that the current APL Premiers are forging a dangerous plot that'll surprise us all. The reraality looks very different to us! The parties are look-alikes more than ever!

We also say look at other unitary states. Most of them are not highly centralised as claimed or feared. Why would that be?

Klaas
Posted by klaas, Tuesday, 1 May 2007 2:55:28 PM
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Not a persuasive article

It claims that Greg Craven was unsuccessful in his defence of Federalism, but this is simply asserted, the authors make to attempt to actually refute his arguments.

It claims that the Productivity Commission Inquiry into Competition Policy (1999) demonstrated that National Competition Policy had damaged rural and regional sectors. This is flat wrong - in fact, the report concluded that regional areas had benefited from NCP, though not as much as metropolitan areas. This is important, because it was a successful example of cooperative federalism, with the States and the Commonwealth working together to share the costs and benefits of a reform program.

“The decision of exactly what is to replace the Australian federation, however, while very important, is a second order issue.” Hardly. It is the responsibility of those who would dismantle our federal system to demonstrate that they have a better alternative.

Throwing adjectives at the constitution – failing, atrophied, dysfunctional …. – doesn’t constitute convincing reasoning.
Posted by Rhian, Tuesday, 1 May 2007 2:55:48 PM
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This notion of "decentralised unity" government has a stench of Orwellian newspeak about it. Effective decentralisation is only possible when the area being governed is small enough to ensure that the "head office" costs of governement can still circulate in the entire region.

But if the region is more than two hours travel from the capital there will be minimal "trickle back" of these funds to the outer regions. So in both NSW and Queensland, as well as WA, the head office portion (20%) of the 15% of GDP devoted to state governance remains in the capital.

And this means the regional economies must grow by 3% a year just to overcome the leakage from their circular flow while the capital region can actually mark time, in productivity terms, and still grow by 1% a year due to the inflow of funds from the regions.

The notion that there are additional economic savings to be had by shifting already oversized state head office functions to Canberra is bunkum. You cannot divorce political science from economics. If the decision makers are located in a regional capital then the investment and jobs will follow and the regional economy will stop leaking funds to the already overcongested metropolis'.

The main "inhouse" benefits of new states are in the improved quality of government. Any increased costs from duplication will be more than offset by reduced diseconomies of scale and enhanced local economic activity.

The simple fact is that the vision for federation held by most of the founders included a number of new states. And the constitution they drew up would have worked quite well if new states had eventuated.

But it was the Brisbane elite who threatened to oppose federation altogether if the constitution was not ammended to make new states subject to the (unlikely) approval of the existing state. Prior to this, every region could petition the British Crown for self determination in the wider interests of the "peace, order and good governance" of all subjects. As Victoria, SA and Qld had done themselves to gain independence from a very obstructive NSW.
Posted by Perseus, Wednesday, 2 May 2007 1:42:30 PM
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Well said Rhian. The authors make a lot of innuendo about the failing federal system, give one example of how it allegedly costs $30 billion per year, without actually refuting the claim that federalism actually makes 86 billion per annum, and then go on to suggest alternate systems.
But what ARE the problems with federalism?
There are a lot of duplication in services and regulations but then that is only a manifestation of how the federalist concept has been botched by the High Court over the last 100 years. If there was a clear delineation of what specific powers the states and federal government respectively had, then this problem would soon disappear.
The authors touch on a meaningful aspect of the issue; to wit: “The appropriateness of continued federalism, … requires that the diversities in society should be territorially grouped” but then fail to expand.
Its true that diversities in Australia are currently not territorially grouped to any significant extent (although there is or has been some grouping: religious and anti gambling types in SA; One Nation types in Qld; pro business types in NSW; the politically correct vanguard in Victoria; the tree huggers in Tasmania; the more reactionary minimum sentencing law and order types in WA and the NT) but any serious disparate Diaspora has failed to materialize mainly because entities like Gough Whitlam, leftist political parties and movements and now even John Howard, have done their best to crush states’ rights and the resultant forging of separate identities.
Sixty years ago there MIGHT have been some reason to claim that Australia was a homogenous society but to entertain that thought in today’s multicultural multi-faceted society would be simply ridiculous.
Posted by Edward Carson, Wednesday, 2 May 2007 7:17:31 PM
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It was actually Mark Drummond who used the assumed 40 states the size of Tasmania to come up with a total cost of regional governance in the order of $20-30 Billion. And my above post on maintaining existing metropolitan city states demonstrates that 60% of that estimate has no basis in reality.

It is also informative to look at the actual size of the 14 unitary states that are supposed to provide some sort of best practice model for Australia and our 7.8 million km2 territory. For the record;

No part of Denmark is more than 300km from the capital, Copenhagen.
Most of Finland is less than 300km from Helsinki.
In France both Lyon and Nantes are 350km from Paris, Toulouse and Marseille are only 600km away.
In Greece, Thesaloniki is only 300km from Athens.
In Ireland, Cork is only 200km from Dublin.
In Italy, Milan is only 400km from Rome.
No part of the Netherlands is more than 200km from Amsterdam.
In Japan, Osaka is only 450km from Tokyo.
In New Zealand, Auckland is 450km from Wellington.
In Norway, Trondheim is only 300km from Oslo.
In Portugal, Porto is only 250km from Lisbon.
In Spain, Barcelona is only 500km from Madrid, but recently has been given close to independent autonomy.
In Sweden, Goteborg is only 400km from Stockholm.
and in the UK, Manchester is only 200km from London.

And how anyone can seriously suggest that one could improve the quality of governance in Cairns or Port Headland by shifting power from Perth and Brisbane to Canberra leaves one completely gobsmacked.

The Austrians, Swiss and Belgians feel the need for a federation when thair entire country is about 200km long. The CzechoSlovakians felt the need for complete independence from each other with regions less than 300km long. The Germans felt the need for a federation because Munich and Cologne are more than 500km from Berlin.

And the proponents of the virtues of unitary governance should explain what, exactly, the EEC is, if it is not a FEDERATION, and a very successful one that most europeans have aspired to join.
Posted by Perseus, Wednesday, 2 May 2007 11:46:42 PM
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It is interesting to note Drummonds criticism of the Federal/unitary study as being biased by the poorer OECD nations like Greece, Portugal etc. As this link shows, there was an original 20 OECD members which has now expanded to 30. http://www.oecd.org/document/58/0,2340,en_2649_201185_1889402_1_1_1_1,00.html

The study examined 14 unitary states and 6 federations leaving out 8 members, including Australia. Of the states left out, the Czech republic, Hungary, Poland, Mexico and Korea only joined from 1994-96 and the Slovak republic joined in 2000. The remaining three were Iceland, Luxembourg and Turkey.

Luxembourg and Iceland are of a spatial, economic and population scale that is of no relevance to the Australian situation. The rest are comparatively new to democratic practices and their economic performance can hardly be assessed in relation to their political structure, with any clear lessons for Australia.

So the 14 unitary states in the study are simply those nations that joined the OECD in the 1960's and have the greatest degree of relevance to the Australian situation. There is no inherent bias in the study as Drummond has claimed. Even the most rudimentary check on the actual membership of the OECD would have revealed that his assertion is not supported by the facts.

Indeed, this begs the question as to which nations would be more appropriate to study, given that the non-OECD nations have been either struggling third world democracies, dictatorships, or a sequence of both.
Posted by Perseus, Thursday, 3 May 2007 2:09:59 PM
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