Australians have become used to 'sameness' - the drab, grey of Socialism. They prize 'safety' over freedom, innovation and risk-taking. I see a future for Australians of Mao suits and vacant stares. After all, they leapt to embrace the totalitarian loss of freedoms of China during Covid: ignored democracy and examples from democratic countries and followed Communist China.

Since Tony Abbott, we hear nothing from the political class about 'fixing' the Federation; and it is unlikely to ever happen.

Australia is rooted.

No question, Dan's Victoria is the worst and neediest, and review the Commonwealth Grants.

There's a problem in the other direction - upwards. The Commonwealth and States are much more interested in aping United Nations population and climate policy, not looking after their boring old legacy citizens.

Competition? Why not. Starting with energy. And the implementation of nuclear energy.

I do not blame Qld for sending NSWs patients to NSW hospitals. Ours are filled to overflowing and our doctors forced to do 24-hour shifts.

NSW has more money than Qld. And if it wants to send their patients here, they can have them sent to private care they pay for.

As for the GST it's the taxpayer's money and needs to be distributed on a per capita basis. Adjusted annually on population changes.
Alan B.

Health and education should be funded with a means tested personal allocation, similar to how aged care in the home is.

"decisions are made closer to the people directly affected who also have access to the best on-the-ground information". Sounds great Graham, if it were true. In fact Brisbane & Perth are just about as far from some parts of their population as Canberra. Moving state capitals to the center of their states, & closer to the areas that produce the wealth would be a great improvement for good government.

Yes the GST is a sore point with many. I would have voted against it & John Howard if I had known that any collected in any state would not stay in that state for the benefit of that states citizens.

I can see no reason why people of the north should be paying for the stupidity of the southern failed states. If Dan the man wants to leave Victorian gas in the ground he should have to source other peoples gas at international prices. There is also no reason to prop up south Oz with a totally incompetent ship yard, just because it can't, or wont, support it's citizens with it's own resources.

Pushing up coal royalties is a reasonable attempt to run intelligent finances in Qld, but pushing them far too high will end up killing the goose that is laying all the gold supporting the state.

God don't we need politicians who have run private enterprise business before they try to run a state or country.

Graham

Your article would be greeted with wholehearted applause by most Western Australians (including this one). The fact that we were able to tailor our Covid response to our particular geography, economic structure and demography meant that life went on almost as normal for much of the first two years of the pandemic when the rest of the world was in severe restrictions and/or lockdowns. We also suffered very little economic damage – annual GSP growth was positive throughout - and have brought our budget back into surplus. Before the border opened in March 2022, we recorded a cumulative total of 10 Covid deaths, almost all being returned overseas travellers.

The same goes for your thoughts on the GST. Without the floor on GST distributions, WA would have received back less than 10c for every $1 of GST revenue collected in the state in 2022-23. Every developed economy has a progressive tax/spending system that takes proportionately more from the wealthy, and spends proportionately more on the poor. I’d support some needs-based adjustment to distributions, and wouldn’t go so far as a the simple per-capita distribution you suggest. But reform is surely needed. The system is phenomenally complicated, but fundamentally horizontal fiscal equalisation as practiced in Australia is close to pure Marxism – from each according to their ability, to each according to their need – which compensates bad economic managers and policies, and penalises good ones, with obvious effects on incentives. The problem is particularly acute where an economic activity is concentrated in one state, such as iron ore mining in WA or coal mining in Queensland. In these cases, most of any gain in revenue from e.g. higher royalty rates is distributed away to other states.

I hope you’re right that the Covid experience results in renewed respect for the benefits of competitive federalism. But it does seem a model that appeals more to the political centre and right than the left. With Labor in government nationally and in all but one state, it may be a hard sell.

Competition between states is a good thing.

What I find disappointing though is that both the author and those who commented before me (except Ttbn) only wrote about competition's financial advantages.

What I like to see is the states competing for freedom, where states that make more draconic laws find their population leaving and migrating to states that make less draconic laws!

Dear Yuyutsu

I think you are being a bit unfair. For me, the most important benefits of WA’s covid response were that it probably saved hundreds of lives and minimised the misery of lockdowns and other restrictions.

Graham’s article also talked about the cultural and legal differences between California and Florida. Financial and economic matters are often stressed in discussions of competitive federalism, but they are not the only benefits. Federalism allows communities to choose their preferred laws and policies without having to conform to a “one size fits all” model. It contains the damage of failed policies, and gives room to experiment with new ones. These are all points in Graham's analysis.

Dear Rhian,

I agree regarding COVID, but the way things were going at the time I was also hoping that it will trigger the break up of this cursed commonwealth and independence for the states.

That would have eventuated, if not for one word - OMICRON.
And nobody in their right mind would feel sorry that we no longer have to live with Delta.