This section allows the Federal Government to provide grants to the States on terms imposed by the Parliament:. Section 96 Financial assistance to States During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.
And this is where some of the problems with federation occur. The Federal Government raises the money, while the State Governments spend it.
They have a cool name for this. The Federal Government provides funding grants to the States, with strings attached and because of this there is a power imbalance. The States might need certain funding for certain services, but the Federal Government may only be willing or can only afford to give them a certain percentage of it. This was never the intention of this section of the Constitution. At the Constitutional conferences the discussion around this section was that it may be used to give loans to the States.
The writers of the Constitution never imagined that the States would give up their revenue sources and powers. Politics and ideology can also get in the way of funding cooperation in the federation when some of the States have the opposite Government to the Federal Government. We saw this with the Gonski education plan, where two Liberal State Governments would not agree to the funding proposal from the Federal Labor party.
In the Coalition Government announced that they would launch a Reform of the Federation white paper process. It was meant to produce a discussion paper in spring , a green paper in autumn and the white paper was supposed to be published in late All that was delivered was the discussion paper and a couple of issue papers, then whole process was dumped in April These topics included raising the GST, giving the States a share of income tax revenue and just in the last few weeks the splitting up of the GST has been flagged for further discussion.
GST is one revenue source for the States that is not tied up in grants. They can use this revenue however they like. The way that the GST is split between the States and Territories is quite complex and is done on a needs basis.
The Federal Government has posed the questions as to whether there should be a floor to limit the lowest possible amount of GST that should be returned to each State. Some of the other Federal Ministers also meet at different times with their State counterparts.
He believes we should fund the States properly or get rid of them. Australia is over-governed and one tier of government must go. That level is the states. Added to this was a new system of National Partnership Payments NPPs to facilitate or reward reforms of national importance. This leads to my second observation about the system that has emerged following the election of The NPPs are paid to the states to deliver discrete projects or outputs.
They are to have a limited time horizon and in respect of reward payments they are only to be paid following a favourable assessment of performance by the CRC. In relation to facilitation payments they are only paid if certain things are done, deemed to be reforms of national significance.
There are a massive number of such partnership agreements, ranging from preventative health to early childhood education, to homelessness and productivity places. Also in the mix is the NPP to deliver a seamless national economy which builds on the competition agenda of the s.
It contains 36 streams of regulation and competition reform. In assessing what all this means for Australian federalism we need to go below the surface and look at the real dynamics at play.
Despite an aspiration to see a change in the culture of inter-governmental relations, required to make this co-operative system work, the players at both levels are reverting to type. Once again highly restrictive requirements and controls are emerging in relation to the NPPs.
Even in the health and education agreements the Commonwealth has moved beyond an outcome agenda to an output agenda with its push for hospital networks and a national curriculum.
The concept of subsidiarity which requires decisions to be handled by the least centralised authority and not handed up to a higher level unless the task cannot be properly undertaken from below, such as the defence of the nation, is as alien to the Commonwealth as socialism has become for the Labor Party. Nor is it necessarily understood by the states and if understood, often breached in dealings with localities and sacrificed in the search for money from the Commonwealth.
We saw how some of these stresses and strains are playing out in the recent revision of the health agreement. Only deft footwork by Julia Gillard rescued the package. Note, however, that it is still an agreement which is yet to be finalised and there is sure to be more conflict over the detail. However, what the health issue demonstrated was the potential that still exists for the states to push their agenda, should they so decide. They do have power in the system. Whilst it is clear, then, that co-operative federalism along the lines developed in recent years is the best way forward for the states it remains doubtful whether it can be fully institutionalised in a way that protects their long-term interests and autonomy.
Attitudes and values within the Commonwealth may have moderated but it is hard to see that they have fundamentally changed. The reality here is that VFI continues to exert its influence. Resources mean power, power leads to temptation and more often than not temptation leads to coercion and control.
The only known remedy to this illness comes from checks and balances and a more equal distribution of resources. Is this possible in Australia today? As I noted earlier the states still have power and influence, even if limited and declining compared to other nations. They do provide a check and important balance to the system. The model of co-operative federalism could work if a genuine effort at addressing VFI was added to the equation and tax-raising powers more evenly spread.
The distribution of the GST to the states and territories was never going to be a successful resolution of this matter. In the first place it is a Commonwealth tax and as we saw last year the temptation to claw some of the money back from the states is strong. In the second place it replaced a range of state taxes which were not as efficient or growth sensitive but nevertheless they did raise revenue for state governments.
The only lasting solution to this state of affairs would be to allow the states back into the field of income tax. For this to occur the Commonwealth would need to cut income taxes across the board, thus making room for the states to apply their own rate.
The tax would still be administered and collected by the Commonwealth. Should such as issue be put on the table it would require a further examination of Commonwealth and state roles and responsibilities.
Note also that it would open up a discussion of further tax reform and simplification at the state level, something the business community have been advocating for some time.
In saying all of this, however, I am reminded of what I concluded earlier in the lecture about the politics of federalism. Why would the Commonwealth agree to such changes and give up power in the process? For this to happen they would need to be convinced that it is a good thing. Even if some on both sides of politics in Canberra saw that it was they would meet strong opposition from colleagues. He did this by campaigning on behalf of Commonwealth power within the Labor Caucus.
It would be safe to assume similar conflict would occur today if a prime minister advocated radical change that returned financial power to the states. For their part the states could—and should—advocate for such a change. However, they have no means under our constitutional arrangements to make it happen. Australia seems destined to have a federal system that at its best is second best. Our responsibilities in such a situation are to make that second best system work as best as we can.
That means the states being more forceful in pursuing their interests and the Commonwealth more understanding of complexity and the benefits of diversity. Is that going to be possible in the adversarial system that has developed in our nation?
Question — We have in Australia over local governments. Geoff Gallop — Well I think its destiny was to be the voice of the states, of course. I think the problem with such a proposal in taking power away from the people to elect both houses of Parliament is it would lack the democratic credentials to be advocated in our current system.
If, on the other hand, the Senate changed its nature to be more like a House of Lords without a lot of power over finance or legislation, a checking but not an ultimate decision-making power, you might consider things like that. But under the current system where we have proportional representation for the Senate I think that encourages smaller parties, independents and minorities and gives them a chance to influence the outcomes through our system.
I prefer proportional representation as a way to do that rather than incorporating institutions into the electoral system. Question — You are a Western Australian and you were their chief for a number of years. We all know that all Western Australians are secessionists, so is your talk a preparation for a declaration of independence and have you come up with a name for your new country yet? So I prefer federalism. Geoff Gallop — Well I think from an analytical point of view there is no doubt that Canadian federalism is much stronger in the culture because of Quebec.
No question about that and you mention Switzerland which is the federal dream in a sense. NSW has gone out there with its drug policy—medically supervised injecting centres; Victoria and the ACT have gone out there with their charters of rights. We create a dynamic as well as reflect a dynamic and I think yes, Canadian federalism is a lot healthier than Australian federalism.
A number of different reform ideas have been put forward with the aim of enhancing the ability of the national and State governments to work together. These include:. Many commentators have called for reforms aimed at altering the financial relationship between the Commonwealth and the States to achieve a greater fiscal balance. Currently, the Commonwealth raises far more tax revenue than it spends while, conversely, the States are only able to raise a relatively small proportion of revenue that is insufficient to meet its many spending responsibilities.
One proposal for reform is to give the States a guaranteed share of tax revenue, beyond the GST, to enable them to finance their own spending responsibilities.
This could potentially involve restoring to the States the power to collect their own income tax. Some commentators have proposed that the federal system be restructured to allow for stronger regional governance. Proponents also argue that the existing State boundaries do not reflect the geographical, social and cultural diversity of Australia.
A common suggestion is that the regions of north Queensland or western New South Wales become their own States, while other proposals suggest having a federal system with as many as 60 regional governments.
Another proposal that is sometimes put forward is to abolish the States altogether and move to a unitary system in which all legislative power is invested in the Commonwealth government. What is federalism? What are the strengths and weaknesses of federal systems? Strengths Flexibility : Federalism allows policy to be customised to meet the particular needs of certain areas and communities.
It has the ability to embrace diverse populations in a single political system while also providing a space for cultural differences. As a concept, it can adapt to the unique circumstances of different countries. Democratic participation : Federalism creates a system of dual citizenship. For example, in Australia, we are citizens of both the nation and a particular state.
We may vote for different political parties at different levels of government. Smaller constituent entities allow citizens to engage with government more directly. Federations are able to do this while maintaining the strength of a larger nation. This provides an incentive for states to improve their services so that they can compete with other jurisdictions.
Check on government power : The division of power between the constituent entities that make up a federation helps ensure that the national government will not become oppressive or authoritarian. It prevents power from becoming concentrated in a single governing body. Also, the need for cooperation between the levels of government provides greater scrutiny of policy. Weaknesses Intergovernmental conflict : Finding a satisfactory compromise between coordinated policy and the individual needs and objectives of the constituent entities of a federation can be a fraught process.
Some of the most significant intergovernmental conflicts in Australia have occurred where the federal government has intervened in areas traditionally belonging to the States. Such conflicts can create an impasse where very little can be achieved.
Too much bureaucracy : Multiple governments with overlapping responsibilities and powers can create duplication and inconsistency.
This can lead to bureaucratisation and increasing costs to businesses. Additionally, it can result in an unproductive lack of coordination in key policy areas, particularly those concerning infrastructure. Avoidance of responsibility : Where there are policy failings, the national government may blame its state counterparts and vice versa. This is particularly a problem where it is unclear which level of government is constitutionally responsible for a particular issue.
0コメント