One aspect of the govenment’s spending spree that has attracted relatively little attention is its implications for Federal-State relations. In important respects, these policies are more centralist than anything seen since the Whitlam era. Throughout the health and education sectors in particular, Howard is seeking to get involved in policy areas that have previously been left to the state, and to do so with direct day-to-day control.
But whereas Whitlam was a consistent centralist, these policies are a logical mess. The general line is that the states should be kept on a tight financial leash, but not relieved of any of their basic responsibilities for schools, hospitals, the TAFE sector and so on. Meanwhile, the Commonwealth will provide lavishly funded frills for schools with a “made in Canberra” label, operate a parallel line of Rolls-Royce TAFEs and pick and choose priorities in the health sector.
As I’ve argued before, it would be a good thing for the Commonwealth to take over hospitals, and probably also the TAFE sector. But that means accepting full responsibility for the sector, not throwing a few billion at whatever came up last in the focus groups, while expecting the states to do all the thankless basics. And it should be matched with a complete withdrawal from other areas (school education and highways are obvious candidates).