Federalism is worth preserving

Take a glance around the democratic world and you'll soon see that there are myriad ways in which a country's basic institutions of government can be established and governmental authority distributed among those institutions.

Most countries have written constitutions; a few have unwritten ones. Some are republics; others, constitutional monarchies. Some are presidential; others are parliamentary. Some have a federal system; others have a unitary one. Some have two legislative chambers while others have only one. Most have some sort of entrenched bill of rights, a few have statutory versions and one or two (including Australia) have no bill of rights.

The point is that within the democratic world there are a wide range of permutations and combinations as regards how power is distributed, limited and legitimated. Add to this the many variations in voting systems and the timing of elections and the potential differences grow. There simply is no single correct model of democratic government.

Having experienced a fair number of the options on offer, my view is that Australia has one of the best systems. The Australian Constitution is an excellent one, better than the alternatives in Canada, the US or Britain.

One aspect of our constitution is that federalism has been locked in. A federal system is one in which some powers are granted to the central government and some to the state or regional governments. These powers are demarcated in the written constitution: there are some matters over which the central government has no legal authority, often matters such as education or health.

In unitary states such as New Zealand, France and (still, but just barely) Britain, all legislative power rests with the central government. It can, if it wishes, delegate some of that power to a city council or regional government. But the point is that it can also take the power back any time it wishes (as the Federal Government here can with the territories). In a federal system the central government cannot take powers away from the states without amending the constitution.

Canada, Australia and the US are the obvious examples of federal systems in the English-speaking world. All are countries covering huge geographical areas. In all three there was a need to accommodate the different regions in these large countries. Part of the deal at the time of birth, in other words, was that the respective written constitutions would allocate some powers to the regions (states here and in the US, provinces in Canada) and some to the centre (Canberra, Ottawa and Washington, DC).

Many people may wonder what the point of a federal system is, other than the historical fact that it was the price that had to be paid to create the country.

Why, these doubters wonder, would we want all the duplication of government and different rules and levels of provision that a federal system brings with it? Why not move to a French or British-style unitary system? A strong defence of federalism is possible, especially in large or culturally diverse countries. True, one-size-fits-all regulations can be more efficient. Sometimes. But not always. Often, having one set of rules for everyone satisfies fewer voters than would be the case under federalism.

A US Supreme Court judge offers this example. He imagines looser, more liberal rules on prostitution being proposed in the US. And he imagines public opinion being more or less evenly divided. Were a one-size-fits-all rule adopted, whether for or against liberalisation, about half the population would be disappointed.

Under federalism, states such as New York, California and a few others can opt for liberalisation and the rest can refuse. This may satisfy 70 per cent or 80 per cent of voters. Not everyone, true. But better than centralised rule-making.

This holds true regardless of whether you would have been on the winning or losing side of a nationwide, one-size-fits-all rule.

Australia is well-served by federalism. I don't like the idea of the High Court or the Federal Government chipping away at it.

Let me be clearer still. As a relative newcomer to Australia, I find the labour relations laws here desperately in need of reform. Labour laws in NZ and Britain are much more liberal, and the heavens have yet to fall in either of those countries. But I dislike the Howard Government's mooted plans to try to centralise and take over this area of law. The High Court will probably side with the Federal Government, but I hope it doesn't.

Good things flow from not infringing states' powers. They flow even when you think the states are using these powers in the service of economically illiterate and downright daft policies. I like federalism in this country, though it's already much weaker than in Canada or the US. I like the written constitution here. In this system you expect, and get, differential levels of treatment and different rules.

Sooner or later one of the states will experiment with more liberal labour relations laws. The benefits will flow or they won't. One-size-fits-all thinking isn't the only way to run a country. Neither is it always the best way. The time to remember this is when you're sure your reforms would be beneficial.