Illustration: Mallory Brangan
The first Issues
Paper in the Reform of the Federation White Paper process canvassed three
approaches to federalism beginning with the letter 'c' ̶
competitive, coordinate and cooperative.
The paper also acknowledged the potential for the cooperative to morph into the
coercive. According to the latest release from the Federation White Paper
taskforce, Australia has a 'confusing' federalism ̶
a problem the White Paper aims to address.
A story about a leak
and a draft
Since our previous blog
entry on the Reform of the Federation White Paper, the taskforce has
released four Issues
Papers about the allocation of roles and responsibilities between the
Commonwealth and States. These papers were designed to outline key issues
before coming up with policy options in the Green Paper on how to reduce
duplication, limit wasteful expenditure and end the 'blame game' between
different levels of government in Australia. However, a series of potentially
damaging 'leaks' from the Green Paper, has led the Department of Prime Minister
and Cabinet to publish a draft
Discussion Paper ahead of a formal Green Paper.
How does the draft
Discussion Paper hope to reform the Federation?
The draft Discussion Paper is a consultation document
containing a number of policy proposals. Although the paper opens with the
optimistic assessment that 'Australia's Federation has worked well since 1901',
the taskforce has identified a particular need for improvements in how we
manage health, education, housing and homelessness. There are also separate
proposals for improving the Federation's governance arrangements and financial
relations.
The draft policy proposals were arrived at after consultation
with the community, states and territories, local government, and the Prime
Minister's recently appointed Expert Advisory
Panel. The paper stresses that the proposals are merely options; they are
not necessarily mutually exclusive, listed in order of preference or approved
by all levels of government. The proposals also vary in magnitude and we are
cautioned not to expect a 'big bang' moment in federation fixing.
In general terms, the options involve either one level of
government 'getting out of the way' while the other adopts full responsibility
for a policy area, improved coordination among governments, or something in
between.
A principled and
practical approach
A key weakness of Australian Federalism, according to the
draft Discussion Paper, is the ad hoc approach we take to deciding who does
what, based on discrete events or priorities of the Government of the day. The
taskforce advocates that we instead adopt a principled way forward.
Interestingly, the draft Discussion Paper has replaced the
principles set out in the White Paper's Terms of Reference with a new set of
'practical' values, including the decree: 'be fair'. It seems that the new criteria
will be used to drive a very pragmatic approach to how federation reform can
best drive improvements in community wellbeing, with a focus on the 'main game'
of effective service delivery.
Will the real green
paper please stand up?
It is unclear how far the real Green Paper will depart from
the draft Discussion Paper. However, we can expect to see the final product by
the end of the year and in light of the upcoming COAG leaders' summit, perhaps
in the very near future.
The process will wrap up in 2016 with a series of suggested
policy preferences published in the White Paper. Based on the draft proposals,
we now know that constitutional amendment is not on the table.
Finally, given the underlying role played by financial
relations in the present state of 'confusion', the Reform of the Federation
White Paper will track closely with the White
Paper on the Reform of Australia's Tax System. As many of you know, the
Commonwealth raises far more revenue than is required to meet its constitutional
responsibilities, while States face a significant funding shortfall. For his
part, the Federal
Treasurer has recently indicated a desire for all levels of government to
take responsibility for their own spending requirements. However, if the White
Paper supports a policy preference for returning full responsibility to States
and Territories in areas like health and education, funding the 'Federation for
our future' will be a significant challenge.
VGSO's experts in constitutional law and intergovernmental
relations can help Victorian government bodies if you require advice on
engaging with the White Paper process.
Managing Principal Solicitor
8684 0899
Managing Principal Solicitor
8684 0220
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