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Getting a 'best possible' system of government by referendum without delay

By Mark Drummond - posted Thursday, 15 February 2001

This is the third and final part 3 of Mark Drummond's discussion of an alternative system of government for Australia. Part 1 discussed the benefits of a "best possible" system and part 2 considered the fiscal advantages of his alternative.

A "best possible" system of government will take several years to develop through a dedicated process of comprehensive public consultation and system design, and our present system of government will remain in place until Australians are convinced that a new system really can deliver better government, and a better deal for individuals, communities and the country as a whole. But the relentlessly compounding cost disadvantages of our present system, and their manner of severely compounding the immense economic disadvantages we face on account of our geographic circumstances, underline the urgent need to move fast on this matter.

If a referendum is to deliver, within a decade, the type of "best possible" system of government Australia will need to reverse its slide down the comparative living standards tables, the public education and consultation processes directed towards the design of a "best possible" system must begin now. Significantly, the bases upon which the referendum will be won in several years time are likely to be the same as those which call for immediate attention to this matter!


While change advocates have the burden of proof, the arguments favouring change are overwhelming, easily understood and comfortably robust enough to carry the day even against extreme levels of scare-mongering. When properly articulated and marketed, they will strike chords among the vast majority who care for Australia's future economic and social wellbeing.

Probably the biggest selling points favouring the move to a new improved system of government are the many billions of dollars per annum which could be liberated from wasteful bureaucracy and regulatory burdens to provide for massive tax cuts and funding boosts for education, health and so on. So the "YES" campaign in a referendum on a move to a new system can be led by a slogans like "Abolish the states to give education, health, the environment etc. the funds they need!" AND "More jobs! When the states go payroll tax will go too!" AND "Global competition is hard out there and we can't afford to carry the dead weight of the states any longer!".

By contrast, the "NO" campaign can be expected to draw upon the usual arguments forwarded in favour of the status quo, based almost entirely on fear and very little on reason as they are.

The "NO" campaign may convince many to doubt that $30 billion per annum or more can be gained by moving to a better system, but would have little or no chance of denying that at least $10 billion (say) could be freed up by such a move. And even $10 billion per annum can provide enormous funding boosts for education and health care (among other areas) which, as the opinion polls repeatedly remind us, most Australians place as their highest government performance priorities!

Some people fear that getting rid of the states and territories will create too centralised a system. But whereas duplicated centralism is indeed a dominant feature of our present system of government, the new model will be specifically designed to provide substantive decentralisation to an extent never before experienced in this country. Constitutionally recognised regional governments with guaranteed powers and revenue entitlements will at last provide strong "close to the people" governments. The new system can bring localities out of the shadows of state governments and at last enable the benefits of truly empowering decentralisation to pass on to the households, families and local and regional communities that form the fundamental units within our society, where needs, opportunities and threats are most directly felt and understood.

Whereas some fear the change to a new system could increase unemployment, a great many new jobs would be created through the move. The tax on employment known as payroll tax, which currently raises some $7 billion per annum for the states and territories, could be abolished once and for all when state and territory governments are gone, and the many billions of dollars that can be freed up through the move can fund the creation of hundreds of thousands of new jobs across both the public and private sectors.


To be sure, a new system along the lines envisaged will require far fewer departmental heads and highly paid "head office" bureaucrats than the present system. But a departmental head's salary can employ around 10 people on average salaries, so for most jobs lost, many more could be created at government service "coal faces" at more or less average salary levels. In this way, the move has the unique power to provide sustainable, structurally reinforced reductions in unemployment and the rich-poor gap, as well as improved outcomes at the "coal faces" in areas of life and death gravity such as health, safety and the environment, as well as education, justice, national security and so on.

The move to a new system of government would not be a time for petty, short-sighted penny-pinching, and we should be prepared to spend good money to make the transition as smooth, ethically sound and even attractive as possible. Senior bureaucrats and other staff affected personally by the changes could of course be provided with just and equitable redundancy payouts and re-training opportunities. And whilst such redundancy and other transition costs might delay the great fruits of change by a year or so, they will represent extremely small prices to pay for the great boost in long term prosperity and wellbeing that will result.

Some believe our present federal system provides critical checks and balances they fear would be lost in a move to a new system. But the new model will remain a federal system but with constitutionally guaranteed regional government powers and financial entitlements, and checks of balance generally, vastly superior to those found in our present system, in which the fiscal imbalance between levels of government is nearly the worst among first world federations and "close to the people" local/regional government is not recognised at all!

Finally, those who fear that getting rid of state governments will end State of Origin footy can rest assured that old state boundaries could continue to be used by sporting bodies just as long as people want them to.

May the public consultation process begin!

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About the Author

Mark Drummond is a mathematics and statistics teacher at the Canberra Institute of Technology who completed a PhD thesis in 2007 at the University of Canberra titled Costing Constitutional Change: Estimates of the Financial Benefits of New States, Regional Governments, Unification and Related Reforms.

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