A Liberal Party in the 21st Century

There are clearly huge hurdles in proper federation reform. The chief obstacle will, ultimately, emerge through taxation and not service delivery. With states and territories collecting only 15 percent of total income tax revenue, their obvious question will be how to run their respective education systems and public hospitals without reaching further into people's pockets.

Thinking of this challenge in reverse, GST reform was only possible because the Howard government shed so many unnecessary state taxes. Careful reform would not wind these reforms back but ensure a balance that achieves the vision of a working federation limiting overlap, duplication, waste and the 'blame game' between the federal and state governments.

The business of accountability

A better federation has, at its core, more accountability. But there are two other ways that clean lines of responsibility and a more accountable framework for government can be secured.

First, more reasonable representation in the federal house of representatives requires the careful creation of more seats. A single member of parliament now represents over 100,000 voters, which has obvious shortfalls in terms of electoral and representative expectations.

Second, the creation of new states needs to be seriously explored beyond part time campaigners and public affairs commentary. While challenging conservative Liberal instincts, new states offer an opportunity for greater localism and enhanced democratic accountability. North Queensland is an obvious candidate, with over 75 percent of Queensland's 93 state electoral divisions sitting north of the Sunshine Coast. A constitutional convention would be required to debate this issue, which directly impacts many more Australians than the other ideas for constitutional reform currently being considered.

Both reforms offer more politicians – perhaps not an appetising objective. But they offer a genuine form of local scrutiny, deliberative democracy and civic accountability that contrasts to our polarising forms of political scrutiny – a 24-hour media cycle and social media.

Australian statecraft – relaxed and comfortable

Foreign policy is domestic policy. And, for that reason, Australia's foreign policy is generally quiet, considered and, ultimately, pragmatic. This pragmatism is built on true statecraft – knowing our strengths and understanding when timing is critical to our international and regional efforts.

It is this kind of thinking from past Liberal leaders that gave us a post-war trade deal and friendship with brutal former enemy Japan (Menzies and McEwen), the soft power of the Colombo Plan (Spender), and the courage to end the White Australia Policy (Holt). Our foreign affairs apparatus, staffed by some of the most skilled civil servants in the world, has served us entirely well in meeting the regional foreign policy challenges of our time – the Bougainville Crisis; East Timorese independence; the Bali bombings; counter terrorism ties with Indonesia; state breakdown in the Solomon Islands; the Asian financial crisis; and a unique trading relationship with China and other regional powerhouses.

This foresight continues to pay dividends in terms of regional links and our deep and values-driven alliances. Nations can share interests but, ultimately, not all can share values. And John Howard's masterful line that Australia need not choose between its history and its geography, while frustrating critics, will be as current in half a century as it is today.

Australian statecraft – strategic horizons and challenges

But there are three broad strategic challenges that will test Liberal and other thinkers and leaders in Australian foreign policy. The first is around enhancing the Australia-US alliance by using greater political leadership to draw the US into the region. President Obama's Asian pivot, for example, or the US-Australia-Papua New Guinea joint naval facility, are commitments that deserve vigorous political follow up beyond statements of intent or 'announcables'.

Second, it is now entirely clear that only a Liberal administration can deliver strong borders, which does more to enhance Australia's global reputation than many imagine. Maintaining this posture, after all, is a critical chemistry of political disincentives, regional networks and multilateral cooperation. But the 'trickle-down' effect of a strong border regime also demonstrates to the world a rigorous immigration program – a comparative advantage in our current global climate.

The third strategic challenge we face is being more creative injecting values into our foreign assistance and diplomatic efforts. The Government's Sports Diplomacy 2030 Strategy is a small but important example of moving in this direction, which embeds sporting concepts that cut across borders – respect for rules, fair play, discipline and learning from failure. Governments are now cautious of speaking in such tones, especially in terms of offshore assistance. But from our own history, these values have informed social cohesion and enlivened commerce. Australia's early economic success, for example, was built on sound institutions but accessible and corresponding attitudes of thrift, industry, and frugality. We should do everything to promote these values in our region and abroad.