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How healthy is the Australian Federation?


 It’s a resilient if somewhat lethargic beast, but a recent check of Australian federalism’s pulse suggests that improvements to its fitness are in order.

The report of the Senate Select Committee on Reform of the Australian Federation concludes that Australia has been served well by its system of government—no coups or civil war, and a history of stable and prosperous democracy. But the Committee also says that to sustain dynamic collaboration and cooperation between governments at various levels, and to prevent outmoded governance arrangements from stemming the flow of benefits potentially available to the nation, urgent reforms are needed. The changes needed do not all require constitutional amendment—which is a plus given Australia’s poor record of change through constitutional referendums. Here’s what the Committee had to say.
Australia has for too long been haphazard in its reform efforts, with periodic bursts of energy and long intervals of inattention. The Committee wants a more continuous program of review, with relevant mechanisms and processes instituted that can manage change in an orderly and timely way. Ad hoc responses to threats and opportunities should be a thing of the past.
When approaching the challenge of reform, the Committee believes that the objective should be to build and formalise an 'architecture of cooperation' that preserves the benefits of cooperative federalism. The Committee also recognises the benefits of ‘competitive tension’—both horizontally (between states) and occasionally vertically (between the states and the Commonwealth in those areas where there is overlap in responsibility). The Committee sees considerable merit in retaining and strengthening such competitive tensions—especially those generated at Commonwealth level through the exercise of its distributive funding powers.
The Committee has concluded that reform of the federation should observe three broad principles:
  • the pursuit of regular, evolutionary change that maintains the federal compact
  • the use of institutions and processes that encourage collaboration between levels of government and promote transparency and accountability
  • the encouragement and facilitation of high levels of public knowledge of federal structures and relations, underpinned by quality research and teaching in the academy.
The Committee notes the success of countries like Germany and Switzerland in the steady modernisation and adjustment of their federal arrangements. Australia needs to institutionalise similar adjustment mechanisms. Australia already has its Council of Australian Governments (COAG) and the relatively recent Council for the Australian Federation (CAF) which comprises the heads of state and territory governments. But the Committee believes that, to be effective in pursuing the three principles listed above, both COAG and CAF need operational reforms.
For example, COAG’s agenda needs to be developed jointly by Commonwealth and State and Territory governments and be made publicly available before meetings. The administration of COAG should be at arm's length from the Commonwealth Government. The chairing and hosting of COAG meetings should be shared. As well, the CAF should meet more regularly, with more formalised Council processes and a better funding base.
While discussion of federalism often focuses just on Commonwealth and state levels of government, the Committee has taken care to address local government, noting its ‘significant responsibilities and close relationship with citizens’. Concerned that a constitutional referendum targeted solely at local government recognition may not deliver that result, the Committee urges a ‘hasten slowly’ approach, and suggests that COAG mechanisms be used to place the funding of local government on a more reliable, long term footing.
As a federation reform strategy, the Committee is attracted to the idea of a regular constitutional convention—an idea proposed by previous parliamentary committees and also by the 2020 Summit. Organising a once-a-decade convention should be made part of a reformed COAG’s mandate.
To institutionalise the constant review and evaluation of the efficacy of the federation, the Committee recommends the establishment of a parliamentary joint standing committee on Australian federalism. The joint committee would have a broad remit to facilitate the wellbeing of the federation by:
  • reporting to the parliament on the activities of COAG
  • examining legislation related to federal state relations
  • evaluating options for policy cooperation between the Commonwealth and the states
  • considering proposals for constitutional amendment.
Citizens’ knowledge about and engagement with federalism and constitutional affairs is patchy at best. The Committee sees great benefit in establishing a dedicated research centre to support and promote understanding of and engagement with Australian federalism.