The political decline of federalism

Polling on federalism is pretty rare, but in a new ANU Poll they have replicated a 1979 question that asked:

Do you think the state governments should give some powers to the federal government, or do you think the federal government has enough powers already?

In the last 30 years, the proportion of people thinking that more powers should be given to the feds has more than doubled, from 17% to 40%. Unfortunately, respondents were not asked which powers should be handed over.

On the question of whether the federal government should provide more money to the states, the proportion opposing it increased from 30% to 38%, perhaps because respondents doubt it would be spent competently.

The second question highlights, however, what is wrong with Australian federalism – not so much the formal division of powers, but the states’ reliance on federal funding. Until that is fixed, the system will never work.

15 thoughts on “The political decline of federalism

  1. Do you think more financial independence would be good? I thought the current taxation structures were a result of that 1940s tax bill.

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  2. Plus there is the issue of whether a country with only 21 million inhabitant really needs 3 levels of government, given places like California (pop 38 million) and Britain (61 million) manage fine with essentially only 2 levels (even accepting that geographical area comes into play).

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  3. Leon – Plus the view the HCA has taken of state sales taxes.

    NPOV – Britain has been moving to regional government. Australia has a federation because that was, politically, the only way to unite the colonies. But there is little evidence that federations are more costly to run overall (Aus, Canada and US all have below OECD average size of government), and significant potential benefits in my view.

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  4. I think “which powers do you think the federal/state government should divest” or something like that might be a better question. As an ignorant guess, I’m going to assume that the average person probably knows very little about the often rather muddled boundaries between federal/state governments on many issues.

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  5. NPOV – If I was to accept your arguement that we need two, not three levels of government, then I would argue for abolishing Canberra, not the States. Has it really been all that successful?

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  6. Actually I don’t have a super strong opinion on whether that we would necessarily be better off with one less layer of government (the sheer cost of moving to such a model now seems prohibitive), but I can imagine the issue of apparently unnecesary layers would come into some people’s calculations when considering which responsibilies to go to which level.
    Abolishing Canberra seems kind of odd – are you suggesting Australia shouldn’t remain a single nation?

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  7. I think its a shame that we don’t have more tax competition within the nation, ie income, corporation, GST. Recent trends in financial markets have created great incentives for states to be competitive on tax, ie see Ireland, and its a shame that we haven’t benefited from them as we might have.

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  8. When I lived in eastern Australia I was a strong(ish) advocate for national and regional government i.e. reducing or removing the state level. Living in the west since 1995 I have come to value the role a state government has in equity of advocacy, representation, resourcing and infrastructure. WA is too large and too diverse to operate as a single region, and notionally so remote from the east as to be overlooked and misunderstood in terms of needs.

    The real problem for all levels of government in our modified democracy, from local upwards, is to keep foremost the raison d’etre – to serve the needs and will of the people, to be outward in intent, not inward and self-serving. Squabbling over issues defined by mostly arbitrary borders is unhelpful in the extreme, as is the relentless states-federal stand-offs driven as much by party politics as by any well articulated vision.

    As to distribution of powers, with 21 million people and vast area, the way forward needs to be consutative rather than competitive, and it may be that one size does not fit all. From my distance the eastern urban coastal strip (unkindly dubbed by some “the human feedlot”) requires different priorities than the eastern and western agricultural and mining areas and isolated urban centres and of course Tasmania.

    It is more about how governments function than how many levels there are.

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  9. If the state government were dissolved wouldn’t the federal government expand eg a minister for each state, a minister for local roads etc.

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  10. Bill, if the state governments were dissolved, then surely the states themselves would be dissolved too, so how could there be a minister for each state?
    Anyway, it’s not going to happen.
    Looks like the need to reform federal-state responsibilities and relations got a bit of push from the 2020 thing, but I’m not sure whether there was much focus on the problem of the whole funding model.

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  11. Hi Andrew,

    Are you going to write something about your experience of summiteering?
    I know your boss is Rudd’s best mate Glyn Davis but please tell us that your brains didn’t fall out – I hope you didn’t sign up to all the ideas on how to get government to spend more of our money.
    If the 2020 summit wasn’t set up to get the intelligentsia to endorse Rudd’s program, then I’m a monkey’s uncle.

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  12. My preference would be that *if* states were to be removed that their powers must somehow be pushed down to the local level – but we all know in reality that they’d almost certainly move up to the federal level. In which case I think it’s dangerous to remove the state level as it provides checks and balances on the federal level (despite things like coag eating away at state sovereignty) and also provides for the potential for state-level competition on things like taxes, school curriculums, etc..

    I agree that where the funding comes from is a big problem – ideally (in my world), state government would fund federal government and not the other way around.

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  13. ideally (in my world), state government would fund federal government and not the other way around.

    The US confederation model is very appealing – but did fail. The solution, I think, is for the Commonwealth to give up personal income tax powers, but not corporate income tax, and let the states levy their own personal income tax.

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  14. Andrew: It’s rather annoying that I share my name with another (and very well known) classical liberal in Sydney… on blogs I generally use Greego so I’ll use that here too in future to avoid confusion.

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