The myth of Commonwealth competence

During the week, as Pollytics blog reported, Essential Research found strong support for a Commonwealth takeover of hospitals.

But as The Weekend Australian‘s editorial argued, the lesson from the insulation fiasco is that it is time to think again about what it called ‘Big Canberra’ – the belief among senior politicians of both parties, often supported by a frustrated public, that the Commonwealth bureaucracy can succeed where state bureaucracies have failed.

While I think it has probably been historically true that in politics – of both the parliamentary and bureaucratic kind – talent has been attracted to the centre, I don’t think there strong grounds for believing that running more services from Canberra would lead to systematic and consistent improvements.

Actually delivering services is a far more complex task than what the federal government has traditionally done – which has mainly been to collect money and then hand it out again, according to policies they have designed. Even there, the Commonwealth’s performance has often been far from impressive.

For instance, overall higher education since the Commonwealth takeover in 1974 has been an area of chronic policy failure, in that the policies attached to funding have made things worse than they could easily have otherwise been. The United States provides a contrasting history, where universities have remained as primarily state responsibilities. As federal theory would predict, some American states have done much better than others. But on average public universities have had much better policy environments there than here over the last generation.

Bureaucratic service delivery faces basic problems of resource allocation, information flows and incentives which are inherently difficult to overcome, whether government is local, state or federal. If anything, they are likely to get worse if control is shifted to the centre. Decision-makers will be further away from service delivery, and consumer-citizen electoral clout will be diluted if national politics is the only forum for airing grievances.

One of the greatest follies of the later Howard years was to join the centralising push. Not only does this ignore the long-held federalist inclinations of the Australian centre-right, but it will make the Coalition’s electoral task even more difficult in future. The more historically Labor-owned issues such as health are seen as federal responsibilities, the harder it will be for centre-right parties ever to win federal elections. We’ll make the Commonwealth like the states, where Labor has long been relatively strong as the party that ‘cares’ most about health and other social service issues, and is rewarded with electoral dominance.

16 thoughts on “The myth of Commonwealth competence

  1. Great post.

    If any idea, no matter how silly is supported by both major parties in Australia surely it garners substantial support. If one or the other turns against it suddenly loses support. This may be the case with a Federal takeover of health.

    Another area where the performance of the Federal government in service delivery could be examined would be to look at Centrelink and the CES.


  2. I doubt they’ll take hospitals anyway. Despite all the complaints, Australian hospitals are comparatively pretty good compared to most places as far as I can tell, so surely they will realize that it’s impossible to satisfy unlimited demand and hence they can only lose politically after the first year when health figures start coming in. This will be especially so with an aging and ever more unhealthy population, and there will always be some sob story about some person that missed out on something.
    If they want to do something on the cheap that has lots of efficacy, they would be better off looking at public health campaigns to stop obvious things that lead to large medical expenses, like the overall increase in obesity. That way they can say they did something, but not take responsibility from the states.


  3. On the other hand, governments have been trying public health campaigns on obesity for decades (Life. Be In It) to little observable effect.


  4. Spot on Andrew. Public hospitals will not be ‘fixed’ by swapping one set of politicians and bureaucrats for another set. Privatising them is the best solution.

    You are quite right to point to higher education as a warning of the disaster that awaits public hospitals if Canberra takes over. Just hopeless.


  5. Centralising makes sense for portfolio’s where either a national approach is needed for economies of scale or efficiency is possible.

    That won’t necessarily apply with hospitals.

    Each state is big enough (other than Tas, NT, ACT) that there’s no real gain in a bulk purchase of MRI machines, etc…

    There are enough demographic differences and climatic differences that the details of health policy vary between regions.


  6. “On the other hand, governments have been trying public health campaigns on obesity for decades (Life. Be In It) to little observable effect.”
    True, regulation seems to work much better, eg. smoking, seat belts etc
    Health is very much related to socio-economic status, so once again, money would be best spent by improving the socio-economic status of the poorest.


  7. Sensational post.

    And to think I was getting worried with your canadolling with the leftist, Andrew Leigh.

    And Russell, so because I make decent money and I look after myself, I should yet further subsidise the lifestyle choices of the peasants. yeah right.


  8. If the Commonwealth takeover simply consists of putting local boards back in charge of hospitals then good luck to them but the idea would need support at the state level or it would be unworkable. And if the idea has support at the state level then the Commonwealth does not need to be involved.


  9. “On the other hand, governments have been trying public health campaigns on obesity for decades (Life. Be In It) to little observable effect.”

    Not necessarily true. The Slip Slop Slap campaign which began 30 years ago led to a cultural revolution in terms of don’t-get-sunburnt behaviour which has been terrific. (As a kid I spent hour after hour in the cricket field without a hat or sun screen, and no one batted an eye lid, because everyone else was doing it too.)


  10. S of R – Last time I checked, suncream and hats were not cures for obesity:). But it is an example of a successful public health campaign that relied on non-coercive changes in behaviour, at least for adults. Low effort plus avoidance of short-term sunburn pain is probably the key.


  11. Actually, I think most health campaigns the government has run have worked (Aids, cigarettes, drink-driving, sunburn, breast cancer, etc.), including with low SES groups (for Russell). I’m not sure they’ve really tried hard on obesity — it was all the pleasant stuff vs. the the rather over-used shock campaigns, which would be ridiculously easy to run in this area (you could just cross out “smoking” and replace it with “being fat” since the health risks of being fat are pretty bad. Alternatively, just showing people who have had strokes that talk like that head-injury add for cars would do also). They could also allow discrimination on things like a-priori weight status for health insurance to try and hit the hip-pocket nerve a bit, although that might not be popular politically.
    In the end, I’m not sure it actually matters to them whether it works or not — a bit like the education (de)revolution. They just need to look like they are doing something to avoid having to do the hard stuff the states do.


  12. Conrad the idea of health insurance premiums linked to weight/BMI/fat %/waist to hip ratio could work.

    The best aspect would be that it would provide a monetary incentive for the low SES. That wouldn’t work on most, but there are some people who go to incredible efforts to save even a small amount (as opposed to just spending less money eating less food).


  13. ” …the idea of health insurance premiums linked to weight/BMI/fat %/waist to hip ratio could work.”
    Oh, and they’d like your genetic information as well.


  14. M – The health police do want a ‘fat tax’ on fattening foods, but given few poor people have health insurance I doubt that would have much impact. Not that I am against health insurers adjusting premiums to risks, but there are already such powerful incentives to not be obese – financial, social, sexual, health – that I am not sure that adding another financial penalty will make much difference.


  15. You are dead right but as usual the people don’t know what it involves ,no doubt they will follow the usa model they are fighting tooth and nail to stop once they read the bill ,trouble is no ne will get to read this one from sneaky labor , they are going to ave a referendum on 4 constitutional issues and changes ,this is dangerous looking at what they did in qld they will stop at nothing to take over health, its the communists 1st dream and total control over all that’s why they are rejecting it big time in usa .


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