Australia’s federal structure is no longer appropriate

American theorist William Riker (1964,1975) has shown that federation has often meant that states have held back worthwhile reform. Both in the US, and in Australia, they have frustrated majority rule on important national issues and social reform. Instead, the Twomey-Withers report highlights numerous benefits, providing "measured progress" and so on.

But there really is another story to tell. Regardless of benefits federalism may have provided for Australia in the past, our group recognises that, on balance, federalism has little or nothing to offer Australia anymore.

The appropriateness of continued federalism, according to William Livingston (1956) requires that the diversities in society should be territorially grouped. If they are not so grouped a society is not federal and if the initial reasons for striking the federal bargain disappear over time, a different arrangement should be negotiated. So in that sense it cannot be argued that the Australian society is federal (see On Line Opinion article) although the Western Australian Law Professor Greg Craven has done his very best, unsuccessfully in our view, to make it appear that way.

The report repeatedly tries to present centralism as the logical consequence of the unitary state. This supposed link is not demonstrated though. In reality, the unitary structure, especially for Australia, would provide a great opportunity for superior and effective decentralisation. It would allow scope to successfully apply the (in the report) much praised European Union principle of subsidiarity at a national level.

In reality most advanced states ARE unitary states with effective decentralisation, often reflected in provincial and local government. The report entirely ignores the serious Australian problem of state level centralisation which, given the massive under funding of the states and the high population concentrations in the capital cities, has short changed the regions and rural Australia for decades.

The various equalisation schemes, since the 1933 Grants Commission, have not overcome the problem. Attempts by the Whitlam Government to directly fund local government were doggedly thwarted and blocked in1975.

It is disturbing that the report grossly exaggerates the positive impact of National Competition Policy as if federation assists that policy. The Productivity Commission Inquiry into Competition Policy (1999) specifically demonstrated that National Competition Policy had damaged rural and regional sectors.

It is incredible that the ALP Premiers resort to some deeply conservative federal theories and implausible comparisons with other federations and unitary states. Australia needs innovative proposals, not self-serving attempts to turn back the clock.

Twomey and Withers briefly consider the alternative, which is abolishing the states and replacing them with a much larger number of regions - as suggested by a number of writers, including one member of our group, the Foundation of National Renewal. But they reject this as impractical and costly.

Here the report is perhaps somewhat more credible but what is not at all considered is the combination of a new national government with stronger local governments, including city governments. The existing Regional Organisation of Councils could play a more significant role in assisting local government, contributing to improved subsidiarity.

The decision of exactly what is to replace the Australian federation, however, while very important, is a second order issue. Australians should first convince themselves that an attempt to repair the original federation is no longer appropriate regardless of a host of vested interests to maintain the status quo.

Also ignored are problems of the electoral system, the resulting archaic two-party system and the extremely rigid and now ossified Constitution.