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Celebrate diversity, if it's all the same to you

By Alan Anderson - posted Monday, 14 March 2005

The Federal Government's proposed incursions into the domain of state governments have elicited howls of protest from Labor premiers. Riding roughshod over ossified state industrial relations regimes is tempting to Liberals, who felt the rough end of the Commonwealth pineapple under meddlesome federal Labor governments.

Similar sentiments have driven the Health Minister, Tony Abbott, to contemplate seizing control of hospitals, while the Education Minister, Brendan Nelson, is developing a national school curriculum. The Treasurer, Peter Costello, even wants to standardise state budgets.

The debate over state and federal relations is as old as Federation. The worrying aspect of this latest outbreak of hostilities is how badly the states are losing. Worse still, there are no signs the Howard Government will exercise the maturity and caution one expects of conservatives tinkering with constitutional arrangements.


The principal arguments for federalism are familiar to most conservatives. It disperses power among multiple levels of government, a safeguard against tyranny. It delegates power to decision-makers closer to those affected by their decisions, with greater local knowledge. And it creates a system of competitive government in which the bad policies of one state administration will be exposed by their failure relative to the superior policies of a neighbouring state.

This last point is crucial. Federalism provides room for experimentation. Successful policies will be copied and bad ones discarded. The diversity of policy environments allows us to evaluate new ideas and accept or reject them.

What is most disappointing is the failure of this free-market argument to resonate with federal ministers. Convinced of their infallibility and preoccupied with short-term political goals, they pay scant heed to the precedent they are setting. Even assuming their policies will be a short-term success, the legacy of a centralised industrial relations system, for instance, will be with us long after Kevin Andrews's moderate reforms have been forgotten.

The next federal Labor government will reward its union backers with a return to government-mandated monopoly, but this time it will be unmitigated by the counter-examples of rebellious conservative premiers showing us a better way.

The favourite word of centralisers says it all: "consistency". This desire for consistency apparently explains why the Federal Government should dictate an ever-increasing portion of our lives. Stalin would, no doubt, have approved. But no one has explained why it is so important that all the nation's children be taught exactly the same things, or why a nurse living in Adelaide (weekly rent $100) should have an identical safety net to a nurse living in Sydney (weekly rent $250).

Consistency is the enemy of competition, the phenomenon that captures the essence of the liberal ideal. To borrow a catchphrase of the left, "Celebrate diversity": Liberals should celebrate it as the alternative is inevitable decline to the lowest common denominator. This is increasingly apparent in the European Union, where an obsession with consistency has led to hyper-regulation and economic sclerosis.


In any case, there is little guarantee the policies the Federal Government wishes to impose on the states will be even a short-term success. Andrews' IR revolution consists not of the long- overdue scrapping of the award system, but of a paring back of the acceptable matters to be included in awards - from 20 to 16. Forgive my excitement.

In education, the Government was re-elected on a platform of parental choice. Why does Nelson not decentralise power below even state level, by forcing states into a voucher system to give the power to parents? Instead, he has chosen to implement every socialist's dream: a national curriculum.

Unless Nelson and his advisers write the textbooks, their monstrous creation will quickly be captured by the education bureaucrats who have forced increasing numbers of children to seek the relative intellectual rigour of the International Baccalaureate. But this time there will be no subsequent reforms forced by embarrassment that graduates in one state are even less literate than those in the next.

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First published in The Sydney Morning Herald on March 10, 2005.

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About the Author

Alan Anderson was a senior adviser to Treasurer Peter Costello and Attorney-General Philip Ruddock. He has previously worked as a lawyer with Allens Arthur Robinson and a computer systems engineer with CSC Australia. He currently works as a management consultant in Sydney.

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