Centralists always suggest replacing the six states with ‘regions’,
between 20 and 37 in number. That structure would require the
appointment of regional governors, prefects, sub-prefects, together with
support staff. France’s regions are administered by an elite corps
préfectoral, a highly-paid class who live like diplomats in their
own country, with official residences, servants and entertainment
budgets. Sooner or later, as in France, our national government would be
forced by public dissatisfaction to create elected regional assemblies,
between 20 and 37 in number. By then any savings would long since have
evaporated.
As matters stand, the 32.7% of GDP that Australia allocates to
general government expenditure is lower than unitary New Zealand’s
39.6%, the United Kingdom’s 40.1 and (before devolution) France’s
52.4%. Australia’s figure is closer to the United States’ 30.5%. Six
sets of state parliamentarians thus seems quite an efficient
arrangement. A variant of the vertical duplication argument is that
Australia’s population is just too small to support six state
governments. Some comparisons may be helpful here. In 1788 the
population of the 13 American states was 3 million, significantly less
than Australia’s population in 1901. By 1832 it had risen to 15
million but probably did not match Australia’s current population of
19 million until about 1845. Switzerland, that land of supreme
efficiency, has 5.5 million people for its 26 cantons. It is a more
decentralised federation than Australia, with even some defence
functions being performed by the cantons.
10. A competitive edge for the nation
Often overlooked even by advocates of federalism is the value of
competition among the states as a means of enhancing the international
competitiveness of the nation as a whole. In other contexts, this is
quite a familiar principle. It is, for example, the basis on which
international sporting teams are selected. Out of the deliberately
encouraged rivalry between local, regional and state teams emerges the
squad that will represent Australia in the Olympics or other
international events. Competitive federalism harnesses this principle to
the goal of earning a better standard of living for all.
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The truth about railway gauges.
No discussion of governmental competition and efficiency in the
Australian federation can overlook the old reproach that Australia’s
mixture of railway gauges is a consequence of the federal system. But
the rail networks were established long before federation. Further,
Britain had more gauges than Australia, but all were standardised by the
1880s. Our federal structure does not explain why, over a century later,
most of Australia’s non-standard track remains unconverted. The
answer, as Gary Sturgess has suggested, probably lies in the fact that
until the reforms of the last decade Australian’s railways were from
the outset almost all government-owned.
Towards more effective federalism
At the dawn of the Commonwealth’s second century, changes are in
progress that may help revitalise Australian federalism.
The goods and services tax in practice provides the secure revenue
basis the states have long needed and is a step towards more balanced
federal-state fiscal relations. The lack of a formal national bill of
rights denies the federal judiciary the de facto veto power over state
legislation that they enjoy in the United States and Canada.
Despite this, many of the world’s other federations tap the
benefits of federalism better than Australia does. There are, however, a
number of simple and inexpensive steps that would improve Australia’s
performance. They include reviving the Senate’s role as the states’
house by establishing a standing committee on federal-state relations,
formalising present inter-governmental bodies by requiring regular
meetings and public hearings, and by recognising that the usual drive
towards national conformism should be balanced by an appreciation of the
benefits of diversity. The High Court should be invited to emulate the
United States Supreme Court and revisit some of the centralist decisions
that have undermined the Constitution. Some purely symbolic measures,
such as the award of honours at the state level, would also help
re-awaken the spirit of independence, self-reliance and community
solidarity.
Conclusion
An awareness of the positive benefits of federalism will make the
constitutional debate a more equal and fruitful one. This will mean
recognising that in a properly working federation government is more
adaptable to the preferences of the people, more open to experiment and
its rational evaluation, more resistant to shock and misadventure, more
politically efficient and more stable. Its decentralised, participatory
structure is a buttress of liberty, a counterweight to elitism, and a
seedbed of ‘social capital’.
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It fosters the traditionally Australian, but currently atrophying,
qualities of responsibility and self-reliance. Through greater ease of
monitoring and the action of competition, it makes government less of a
burden on the people. It is desirable in a small country and
indispensable in a large one.
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