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Public Sector Informant : PSI
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Louise Earnshaw, Australia Take the next step with an Endeavour Award. For more information and to apply for an Award, go to www.AustraliaAwards.gov.au Applications for 2011 round open on the 5th April 2010 and close 31 July 2010. adcorp23868 [MAY 2010] THE PUBLIC SECTOR INFORMANT 43 [POLITICS:GRAEME ORR] money pudding that cures fractured federalism If most states wish to sign on to a Commonwealth plan, it would be hypocritical for one state to hold that up in the name of 'states' rights' your model in those factories that were ready for it, and let the factory with its own model do things its way. Then, in a few years time, you could compare performance. In political science it's called competitive federalism, but we could also call it governmental diversity. In a federal system, we tend to look for diversity between states at the same level; different rates of stamp duties, for instance, or different drink- driving limits. We used to see it culturally, outside government, too. (Remember the strict divisions between which football code was followed in which state?) In any complex federation there's also a lot of overlap between national and regional government -- especially in Australia, where the states are powerful in theory but the Common- wealth now has most of the money. This overlap is usually labelled a problem, a cause of the ''blame game'' where there aren't clear lines of accountability. But given cooper- ation, the overlap can be used to accommodate, even to embrace, com- petitive federalism. There are plenty of precedents for this kind of two-track approach. Years ago, Victorian premier Jeff Kennett ceded his state's industrial relations to the Commonwealth while the other states retained a mix of state and federal laws. Today, that balance is inverted. All the states bar Western Australia have ceded their private sector industrial laws to the Com- monwealth. Of course, it's an election year, both federally and in Victoria. Rudd was goaded into trying to appear decisive by Opposition Leader Tony Abbott, who has caught attention with his own He-Man act. So what we saw in both the politics and reporting of the health debate were the politics of posturing. Sure, through Common- wealth eyes it would be cleaner to have a single model for public hospitals nationwide. But if one or two states really wanted to hold out, the answer was to sign up the states that were convinced and negotiate a distinct model for the hold-outs. As long as no state wields a veto power, competitive federalism can avoid state-specific gouging of benefits. The posturing we've witnessed has its roots in ''anti-politics''. Not Pauline Hanson-style, bring-the- temple-down anti-politics, where someone new plays politics by feign- ing that they are not a professional politician, but a more routine kind of anti-politics. It's the politics of put- ting down other politicians while scrambling for a moral high ground. Negative politics can be a turn-off, but it can also work when the electorate is grumpy. And this one is grumpy (hardly surprisingly after an economic downturn). The grumpi- ness is evidenced by oppositions becoming more oppositional lately, which further stokes the grumpiness. Anti-political politicking -- also known as finger-pointing -- has actually been endemic in Australian politics since the First Fleet. After all, the colonial governors had Whitehall, and the colonial parliaments had each other. Since Federation, it has been institutionalised in stoushes between the Commonwealth and the states, or stoushes among the states. It is especially useful because it permits members of the same party to ''stand up'' to each other, and thereby appear non-partisan. Anti-politics particularly flouri- shes in federations because leaders can criticise each other across party lines. By rights, that shouldn't work: doesn't it project disunity? It may, but in standing up to your own kind, you appear above partisan politics. Of course, some of the posturing was just a negotiation tactic: hard bargaining over money, more pecuni- ary than policy. Of course, this was theatrical as well. The spigots opened and extra money flowed -- as it was always likely to -- so everyone could claim credit (the states for ''forcing'' the money; the Commonwealth for providing it). That still leaves West Australian Premier Colin Barnett, who doesn't mind the plan and wants the extra funds, but objects to adjusting the 1999 agreement that GST revenue will flow, no strings attached, to the states. Of course, he is the only Liberal premier and he'd not want to hand Rudd an easy, bipartisan con- sensus. But let's take Barnett at face value: he sees the 1999 GST agree- ment as a fundamental principle. At law, it is not. It is not enshrined in the Constitution. It is not a binding contract. It is a ''framework'' of ''principles''. The GST, at root, is just another Commonwealth tax. But Rudd would need Senate approval to recast it. After all, both Howard and Rudd governments enshrined the intergovernmental agreements in legislation. Politically -- and in the spirit of cooperative federalism -- the agree- ment should only be reworked by consensus. The current agreement was expressed to ''operate indefi- nitely from January 1, 2009 unless the parties by unanimous agreement in writing revoke it''. Barnett is free to hold onto his principle and hold out against such a rewriting. But to do so would hardly be in the spirit of federalism. If most states wish to sign on to a Common- wealth plan, it would be hypocritical for one state to hold that up in the name of ''states' rights''. Provided Western Australia is left in no worse position than when the negotiations started, it is entitled to preserve its status quo in a new intergovernmen- tal agreement, but not to object to other states choosing a different path. If there really is an important policy or principle difference under- lying the West Australian position, then the ideal federal outcome would be for its model to apply to it alone, and a different model apply else- where. But perhaps there is no policy at stake, and money will trump any posturing over principle. If so, while this pudding is still cooking, expect everyone to soon be tucking into it. Graeme Orr researches the law of politics at the University of Queensland's law school. This article first appeared in Inside Story (inside.org.au).
PSI - September