We need strengthened national and local governments... not states!

Whereas at Federation we were about the wealthiest country in the world, the rigours of global competition have seen our wealth slip significantly relative to other first world democracies.

And whereas Western Europe and North America each have several hundred million relatively wealthy people to purchase goods and services produced by countries there, and help maintain economic stability as a foundation for social integrity and prosperity, Australia is surrounded by relatively poor Asia and Africa and uninhabited Antarctica, and has less than 20 million people.

Our far flung settlement patterns and isolated location no doubt partly explain our decline, but we have also suffered under the increasingly crippling weight of duplicated centralism and the enormous, relentlessly compounding costs hence imposed.

My own estimations (see http://arachnid.apana.org.au/asc/cost.htm) are that our present system of government hosts wasteful inefficiencies, in terms of bureaucratic and regulatory duplication and coordination burdens, which amount to some $30 billion per annum.

We can do little to change our geographical circumstances and associated economic disadvantages, but, fortunately, our Constitution and democracy do allow us to change our system of government. So ...

Which level of government should do what and why?

A "best possible" system of government for Australia should involve two principal levels of democratic government. We need strong, effective close-to-the-people local or regional government and strong, effective national government.

Everything which the states and territories do at present could be done better, in respect of all relevant criteria, at either the national scale or a scale much closer to the people than the states and Northern Territory are.

We can achieve the system called for here by simply amalgamating, or coalescing, state, territory and federal governments into a reformed, rationalised national government, leaving local governments in more or less their present form.

We couldn't possibly satisfy the essential closeness-to-the-people criterion if we forced amalgamations on to local governments – especially in sparsely populated rural communities.

Local governments should be assigned powers and responsibilities generally held by local councils in their present form plus additional general community and regional development roles with industry, employment, labour market support and welfare elements. I emphasise the word general here to draw attention to the significant autonomy that such generality should necessarily provide.

The idea is that local government could put on a big town or suburban barbeque, or under-write the insurance or overall costs of the annual town show, or employ people experiencing hard times etc. etc.

Powers and responsibilities assigned to the national and local governments should be formalised in a new Constitution which should also provide local governments with equitable guaranteed revenue share entitlements. Much like those determined by the Commonwealth Grants Commission for the states and territories in the present system; such revenue guarantees are arguably the very substance of equitable decentralisation.