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Federalism is a dead idea. So what now?

By Mike Steketee - posted Friday, 30 April 2010

If last week saw Kevin Rudd's brave new world of co-operative federalism in action, why did it bear such an uncanny resemblance to the premiers' conferences of the bad old days?

You may recall the script: the premiers express outrage at the miserly money the commonwealth is offering, warn that states and their inhabitants will all be rooned, the prime minister throws a few more dollars at them, and the premiers emerge to tell their states' voters how their tough stand saved the day.

Off stage, Canberra journalists are briefed that the federal government gave the states no more than it intended and, sometimes, less.


John Howard's decision to allocate all of the GST revenue to the states was supposed to end all that, and it did for a while. The states even agreed to abolish some of their more inefficient taxes in return for the money.

But what Canberra gives it can also take away and this week, after an all-in brawl, it took back one-third of the GST revenue in exchange for health cash in the hand, with further negotiations with Western Australia pending.

Surely there has to be a better way. Howard offered the Irish, I-wouldn't-be-starting-from-here solution this week: "If we started this country again, you wouldn't have states, you'd have regions."

Many voters agree: in a Newspoll survey commissioned by Griffith University's federalism project and reported in Inquirer in recent weeks, voters rank state governments below federal and local governments in terms of how well they do their job and a rising number, now up to four in 10, favour abolishing them.

But for all the illogicality of governments based on colonial boundaries drawn in the 19th century, the reality is that it is not going to happen.

The states are entrenched in the Constitution and voter support for them as a counterweight to Canberra remains substantial, particularly in outlying states such as Western Australia and South Australia.


The likelier outcome on present trends is that the power of the states will gradually wither. But the panoply of state and territory parliaments and their bloated bureaucracies will remain. That is no way to run a country.

Apart from the regular parade of scandals, the main reason state governments are on the nose is because voters do not think they do a good job in delivering essential services such as health, education and public transport.

At least to some degree that is because they do not control their own destiny. Queensland Treasurer Andrew Fraser who, at 33 brings a clear eye to a situation to which others have grown accustomed, said last year.

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This article first appeared in The Australian, April 24, 2010.

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About the Author

Mike Steketee is The Australian's national affairs editor and a former political correspondent and Washington correspondent. He won a Walkley award for journalism leadership in 2000.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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