Canning federalism - the Liberals' legacy?

The recent announcement by Prime Minister John Howard that more federal intervention is on the way presents the federal-state crisis Australia had to have. What are the underlying causes of the situation and what is the ALP planning to do about it, if anything?

Federal take-overs by the Coalition will mean constitutional mayhem and disbelief by many who regard themselves as small "l" Liberals. Staunch federalists, opposed to an increase in national powers for nearly 100 years, the Coalition's current precarious electoral position has resulted in the PM's grotesque political opportunism so that virtually nothing of the federal system is safe anymore.

A Howard-appointed High Court is likely to back this trend as it did on WorkChoices. After industrial relations, education, hospitals, and involvement in Queensland local government amalgamations, Howard now wants to take control over ports. He is prepared to throw federal taxpayer money at any state problem, especially in marginal seats.

The chickens are coming to roost though. Australians voters are now told, "we should be focused on outcomes, not systems", appropriate or not. The cause of the problems is that the system has long been inappropriate. In Peter Costello's words, "current federal-state arrangements are often in a mess". The list is far longer though than suggested by the key issues mentioned above. Other friction has occurred over bushfire control, liquor licences, all kinds of other licences, taxation, electricity, law, control over airports, national security, decentralisation, justice, water reform, grants commission decisions, transport, and the national data bank. Over all these issues federal-state disputes have raged in the last two years.

All of this is very much part of economic management of course, presumably the Coalition's forte, although rarely identified as such. The enormous waste involved in federal-state relations, not to mention the excess of politicians and civil servants, has often been commented on; however, only recently has the Coalition admitted to its own frustrations and woken up to this costly reality as well.

The Howard way out of the problems looks ugly, unconvincing and starkly opportunistic. It is far from a pretty picture, in fact quite possibly an electoral liability when reading about the outrageously populist largesse in marginal seats (Sydney Morning Herald, August 20, 2007).

The solution is a different, effective system of governance, appropriate for the times, and that means a two-tier system. Australia needs to strengthen national government as well as, in my view, local government. This requires a major constitutional restructure. There may well be a significant role for voluntary regional councils, as supportive (already existing) adjuncts to local government, a kind of mezzanine level, and city governments as part of a more comprehensive local government role.

We need to abolish the states, where government power is really centralised, and link all local governments directly to the national government. Given the massive improvement in communications and transport since 1901, but especially since World War II, this structural change surely is long overdue.

The archaic Australian Constitution has not kept pace with the changes. The reason for that is, in art at least, the two party system, and that is the direct result of Australia's dominant single-member district electoral system. Can we start debating these causes and effects?

We need to add to this the great difficulty imposed by section 128 of the Constitution which has proved to be such a stumbling block to amending it. It stipulates that not only is an overall majority required (for a referendum to pass) but also a majority in a majority of states. Here the federal constitution itself is a major barrier. Consider this together with the constitutional requirement that constitutional amendments can only be initiated by politicians. In practice this has meant that:

1. initiatives that do not in some way benefit politicians won't be generated;
2. any initiative needs to have the full support of the politicians of both major parties otherwise the referendum won't pass.

This explains that there is a need for an electoral system that provides much greater diversity and flexibility in parliaments and initiatives for referendums (for such changes as replacing the federal system) need to come also from the people directly. Logic suggests that these are necessary preparatory steps towards structural change. The problem is that neither of the major parties would be interested in taking these steps. On the face of it the political system as well as the constitution of this country looks to be totally frozen.