Features Australia

Even the states dislike federalism

There can be only one explanation why the Victorian government would ask Canberra to help it out – cowardice

21 March 2015

9:00 AM

21 March 2015

9:00 AM

Did any of you notice that the State of Victoria is now lobbying for national anti-bikie laws? Why, you might wonder. Victoria can pass any criminal laws it pleases. It can be as tough or as soft as it wishes. But the problem, you see, is that it doesn’t want to be tough. Or rather, it doesn’t want to pass any laws that are as tough as those of Queensland. Or of New South Wales. Or of South Australia.

The Victorian Premier and Attorney-General, indeed the whole of the Labor government in that State, have a certain inner-city, latte-sipping group of voters who don’t like the idea of the sort of laws that admittedly take a hard line on these matters. On the other hand, Victoria’s government doesn’t want to be seen as too soft either. If you are the ‘soft touch’ State it might just transpire that human beings really do respond to incentives. In other words, Victoria might come to be seen as the soft touch State with disproportionate numbers of bikies heading in that direction.

The Victorian government doesn’t relish that outcome either. So what to do? What to do? Then it hits them: lobby for a one-size-fits-all national response. We can plead with Canberra to take on this matter. We can give the Feds the authority to make a law for everyone. That way Victoria won’t become the destination of choice of the tattooed two-wheeler crowd.

This is genius, they think. If the one-size-fits-all national law is too harsh, well that will be evil Abbott’s fault. Not ours. If it’s too soft, who cares? It will be too soft for all the States. The fact that this is a matter that lies within the State’s aegis, and that it is the State government that is charged with dealing with such issues under our Constitution, bothers these Victorians not a whit. (Not all that surprising from a crowd seriously pondering spending a billion dollars on nothing.)

Any full-blooded exponent of federalism in this country, however, can only throw up his hands in despair. It is bad enough that we have a High Court that has the most ‘favour the centre’ federalism decision-making track record of any comparable top national court in the world. It is bad enough that repeated Commonwealth governments in this country, from both sides of politics, never miss a chance to suck ever more powers away from the States and over to themselves, like some giant Canberra black hole.


Now, though, we are at the deplorable stage where State governments actually lobby to give up their powers. It’s as though they’ve been reading some unknown anti-existentialist philosophers, who advocate handing all of life’s decisions to others. You know – because it will make for an easier life. Better to do nothing, make no decisions, be responsible for zippo and so bear no consequences yourself. ‘Far be it for us to make a call one way or the other’, they intone to themselves. ‘Why have to legislate if we’d then have to defend our choice to the voters, not all of whom would be happy?’ Better to just beg Big Tony up in Canberra to come and take care of this for us poor State politicians.

It goes without saying that this is a pathetic state of affairs. I am usually sympathetic to the plight of the States in this country, what with the High Court in the past having given a big tick to the centre’s poaching of State income tax powers, at least for all practical purposes and unlike any single other federal system of which I am aware. And then there’s the High Court’s having turned interpretive cartwheels to fit labour relations under the ‘corporations power’ in the WorkChoices case. And I doubt you can even describe it as interpretation at all what they did in the egregious and openly laughable Tasmanian Dams case.

My point is that one can normally empathise with Australia’s State governments, seeing as they’ve been turned into mendicants who rely on speed camera revenue and Canberra ‘grace and favour’ payments to make ends meet and who exist in the world’s worst vertical fiscal imbalance set-up. But bad as things are, this new sort of attitude displayed by Victoria is appalling. Pleading for a one-size-fits-all imposed solution so that you can avoid making a call yourself really does make even a committed federalist such as I suspect that federalism in this country is stuffed.

As a native born Canadian I can assure you that no Canadian province would ever indulge in that sort of self-abasement. And I cannot even imagine it in the United States or Switzerland.

Federalism as a system delivers the goods. The evidence is clear that federal systems (think Germany, the US, Canada, Switzerland) are wealthier than non-federal ones, whether they have resources or not. They also have fewer bureaucrats per capita than unitary systems, even with the extra layer of government. And if you wonder how that can be just consider how the massive centralisation of power in Australian universities these past two or three decades has been accompanied by an explosion of new administrators, bureaucrats, DVCs, PVCs, and legions of non-teaching and non-researching staff who are there to serve the centre (and impose ever more regulations).

But federalism only works when it is competitive, when it produces different outcomes in the different States or Provinces or Länder or Cantons. So-called co-operative federalism is just jargony claptrap. If you honestly believe that government nearly always gets things right then by all means you should support a centralised unitary State. If, though, you think governments screw things up as often as not then competitive federalism gives you different outcomes in the same country, and the ability to see that some are better than others, and to copy the good outcomes. That’s what would be happening here if labour relations had been left to the States, as our Constitution intended.

Yet demanding one-size-fits-all outcomes, or worse having the States plead for it themselves, extinguishes the benefits at a stroke.

I’ve been saying for a while now that only by returning income tax powers to the States can we begin to repair what at federation was an excellent federalist set-up but one which over nine decades has been gutted and re-designed by a grossly over-centralist top court. But I confess that I never thought things were so bad that a State would beg to have the feds come and make decisions for it

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