Vertical federal competition

The latest Newspoll survey on federalism sponsored by Griffith University has another small piece of evidence that the Pincus position – the idea that Australian federalism works principally through vertical interaction and competition between the Commonwealth and the states rather than horizontal competition between the states – may have popular support.

A question on features of federalism (there are several in the survey, but the answers to most have not been released) asked whether ‘different levels of government being able to collaborate on solutions to problems’ was desirable, and more than 90% said yes. While respondents may have had in mind better bureaucratic coordination, like the two houses in a bicameral system two levels of government in a federal system may offer different perspectives, interests, experiences and abilities.

The current situation in which Victoria, with extensive experience of a case-mix system of hospital funding, is putting an alternative to Kevin Rudd’s hospital funding plan into the national debate is a good example of how the policy competition that is supposed to be a feature of horizontal competition between states can also work vertically.

Another interesting feature of this Newspoll is the question on what institutions respondents would like to have in 20 years time. There is 42% support for regional governments, an idea that has been at the fringes of policy debate for decades but never really had effective champions in the political class, who are usually deterred by the constitutional difficulties involved. Perhaps surprisingly, support is only slightly higher (45%) in Queensland, the state with the strongest regional differences.

4 thoughts on “Vertical federal competition

  1. Ironically, the success of the Victorian case-mix model (made possible under a federal system ) suggests that the problem in this case is not so much blurred lines of accountability but a plain lack of political will by the States to reform.


  2. What’s constitutionally difficult about regional governments?

    Just make more states. Could be done tomorrow with the agreement of the Federal and State governments involved.

    States are regional governments. Why not use them for what they were intended?


  3. Clinton – I think it is more difficult than that, from the Constitution: “123. The Parliament of the Commonwealth may, with the consent of the Parliament of a State, and the approval of the majority of the electors of the State voting upon the question, increase, diminish, or otherwise alter the limits of the State, upon such terms and conditions as may be agreed on, and may, with the like consent, make provision respecting the effect and operation of any increase or diminution or alteration of territory in relation to any State affected.”


  4. I think the simplest option is to let the states to it, akin to American counties. Presumably in an Australian context they’d mostly deal with infrastructure and major planning questions (the sort currently dealt with by the state because local governments are too local). State governments that fall because of traffic or public transport congestion should like it because then they won’t; thinking in a Victorian context, the regions would like it because Melbourne would find it much more difficult to steal their water, or build desalinisation plants/toxic waste dumps in their territory. Under this model, local governments would have the option of becoming more local.

    State governments would keep most everything else. (“What else?”: Well, then it doesn’t matter if we keep state governments around, if they have nothing left to do.)

    The only difficulty here is that states would have to see some sort of reason to do it. I don’t think it’s going to happen, but this problem is political, whereas when you’re turning states into regions, there’s Andrew’s problems. (Plus, who gets to be Victoria, Melbourne or some othe part?)


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