The case for federalism

Having established that the idea of ‘regional government’ makes no sense in the Australian context, let’s look at the real issue of centralism versus federalism. Would we be better off without a unitary system in which a single national government controlled everything [1]? I don’t think so[2]. I’ll present my case over the fold. You might also like to look at Ken Parish, Gary Sauer-Thompson and Andrew Norton. The Currency Lad disagrees, endorsing Keating’s view of the Senate, and Whitlam’s view of the states.

There are various ways to justify a preference for federalism. For example, there’s a whole body of Catholic social teaching around the concept of subsidiarity. I am reasonably positive towards the concept, but I’ve never explored the associated doctrinal baggage.

My starting point is that of liberal democracy. The essential point of liberalism is that, in matters that don’t affect anyone else, I should be free to choose for myself. To make this operational we need to push it a bit further and extend the domain of personal choice to things that might have a marginal impact on others (perhaps requiring some sort of payment or compensation) but primarily affect the person concerned.

Now suppose choices affect me and someone else. Then the principles of liberal democracy imply that we should both have a role in making choices, and that neither of us should be allowed to coerce the other. But beyond preventing coercion, the situation doesn’t give any third party a right to participate the choice, any more than they would have the right to dictate my personal choices.

Applied more generally, the same arguments suggest that, whenever the main effects of decisions are local to some group, they should be made by that group. Only when there are substantial shared interests should a larger group be involved.

In the Australian setting, lots of issues are primarily of concern at the state level (which is also, for practical purposes, the city+hinterland level). What happens to schools or historic buildings in Melbourne is of very little direct concern to a Brisvegan like myself, and vice versa.

The same is true of course, as regards Canberra and other cities, and ordinary Canberrans feel much the same as others regarding outside dictation (from which they suffer more than most). But the view from ‘Canberra’ in the political sense of the word is very different. Ministers and national bureaucrats see diversity as untidy and undesirable. They are forever promoting the idea that everyone in Australia should have identical institutions at every level.

The ultimate expressions of this viewpoint was Napoleon’s boast that he could tell what every schoolchild in France was studying at any given moment. It takes a degree of modesty uncommon in the political class to realise that it’s better to let people make their own decisions than to impose a uniform decision upon them.

Most Australains are instinctive federalists. Even relatively recent arrivals in a state rapidly adopt the local rather than the national perspective on may issues. The big problem is on the revenue side. There are generally big advantages to taxes being levied at a national level, and the central government is therefore always in a strong bargaining position. But this is all the more reason to insist on the importance of federalism and to vote against overweening national governments.

This leaves open the question of who should do what. Arguably the worst problem in Australia today is not excessive centralism, but the federal government’s practice of sticking its nose into all sorts of issues while leaving the heavy lifting to the states. The states have the job of running the school system, for example, while the feds snipe about whatever their preferred cause of the day might be (gender equity when Labor was in, the three R’s when old-style conservatives have the running, who knows what tomorrow).

As I’ve argued previously, health has to be national simply because Medicare and the PBS can’t be run any other way. So the Commonwealth should take over hospitals as well. In compensation, the Commonwealth should get entirely out of schools, roads and housing. Generally speaking when issues can be dealt with adequately at a state level, they should be.

fn1. Presumably like state governments today, a unitary national government would delegate some tasks to local authorities, but these would have no independent existence.

fn2. This is an issue on which I have changed my mind. In the 1970s, I was a Whitlamite centralist, but I shifted position over the 1980s and early 1990s, in favor of a system of checks and balances. For the same reason, I now favor bicameralism and, at least for upper houses, proportional representation. I plan another post on my political evolution some time soon.

40 thoughts on “The case for federalism

  1. Andrew,

    Queensland is typically regarded as outside the south-east triangle but issues of infrastructure planning and the like are highly relevant to us – ask anyone who lives on the Gold Coast.

    Or anyone who wonders why the Adelaide to Darwin train link got the nod ahead of the much shorter Mt Isa to Darwin route.

    Or anyone in Tasmania interested in Basslink or anyone in Adelaide affected by power black-outs.

    Looking at Australia from a purely Western Australian attitude can be as restricting as looking at it from a purely Sydney or Melbourne perspective.

  2. Andrew,
    Indeed you are very wise in the way of the argument and I thankyou for having a discussion with someone who can often lapse into servere bouts of smart arse-ness.
    The 330,000 people in Canberra are made up of: bureaucrats and public servants(by far the biggest group), politicians, politicial support staff, Foreign representatives, people involved in light industry at Fyshwick, students and staff at ANU, people in the publishing industry and people involved in the standard goods and services to support them. Now if you consider any of Perth, Adelaide, Melbourne, Sydney or Brisbane, there is a lot more than that and they don’t even host the federal bureaucracy, only state.

    I haven’t read the book, but by the looks of it, it is a critique of government and bureaucracy, so should be a fun read. My book recomendation on the same topic is Frank Herbert’s God Emperor of Dune.

    And I repeat, power is not centralised in my plan, only bureaucracy, so I am not arguing that: “centralisation of power does not mean the centralisation of bureaucracy”, I am arguing that: “centralisation of bureaucracy does not mean centralisation of power”. But anyway I am not entirely arguing for centralisation of bureaucracy either as I mentioned in my last post, as our local councils will have a much larger say than they currently do in policy and implementation (which I haven’t yet properly outlined).

    Nic, it is not a small world, internet forums like these have just made a big world diggestable by linking people with the same interests. See what I mean about being a compulsive smartarse? I am the same in the real world.

  3. Cameron, I only partially understand what you said, though I do know that our government largely functions through tradition rather than constitutional law. Anyway I don’t quite see what that has to do with my arguments. What you said affects all of our proposed systems based upon the current system.

    But yeah, lets get a proper constitution and a bill of rights while we’re at it.

  4. Ian,
    On the infrastructure, I think your points make a good case for devolving the decisions – the railway from the Alice is a good example of why federal infrastructure projects are not always the most sensible.
    When you say public servants as separate from bureaucrats I would question the distinction between the two – a bureaucrat and a public servant in this context are indistinguishable.
    On centralisation, as soon as the bureaucracy is centralised the power is centralised – one necessarily follows the other.

  5. Andrew,

    You have defined the biggest problem facing Australia today.

    “bureaucracies hardly ever accountable to those they rule over and are only dimly accountable to those that are nominally their bosses – the politicians. That is why the power has to be as devolved as possible to allow for the best possible outcome.”

    I do not agree with your solution of making power devolved as possible as being the only solution. The dictators of fascism (Hitler), communism (Stalin) and some in South America could make them accountable or they simply disappeared

  6. I didn’t mean to suggest that public servants and bureaucrats are disjoint sets, that is why they weren’t seperated by a comma. Your understanding of power is narrow. I don’t think that bureaucrats have much power at all, the legislators do, the voters do, the media does, big business does. The only political power the bureaucrats have is their union. All of your posts and arguments are based on an incredibly limited and schematic idea of power.

    Does anyone disagree that Health, Education, Award wages, criminal law, police and current state taxes would be more efficiently administered at the federal level, much the way that posts and telegraphs are more efficiently adminstered federally?

  7. Benno,

    You must have never been on the wrong side of a tax auditor, the local building inspector, town planner,ordinance inspector, parking officer or police etc. These people have real power and guess what, they use it and some times they charge for it.

  8. These problems you mention Econowit, will not be increased by centralisation of said powers, nor will they be lessened by more states, or transferral of current commenwealth powers to the states.

    Abuse of power on this fundamental level has some examples: A doctor using her proffessional authority inappropriately, a cop beating you up (using much more force than required), a heroin addict threatening you on the street in order to exact money.

    They can all be lessened by legislation and a commonwealth bill of rights. But they are not relevant to the power that we are talking about, or to this debate. That is because they are all people personally using their position to futher their own aims (corruption). And anyway the net effect of all of this centralisation is smaller government and smaller bureaucracy. So please keep it relevant. I look forward to more off-topic attacks designed to shut out my ideas and replicate your own, but actual discussion is most welcome too.

  9. John, I would be very interested if you have done any thinking on the industrial relations question. Beyond the obvious – i.e. Howard couldn’t care less about federalism if he can screw workers – the lack of common rule at the federal level seems to me to be the first obvious disadvantage in a unitary IR system.

  10. Benny,

    To which level of power and corruption do you refer? The local councillor who has a traffic inhibitor installed in his street so that his house value increases; The state secretary of a major political party that gets his non complying building application approved in a couple of weeks, when it takes the average punter many months or; The Prime Ministers brothers company that is shown favourable treatment.

    Power (over)- under his control.

    ‘Power tends to corrupt, and absolute power corrupts absolutely’ “And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that. All power corrupts; absolute power corrupts absolutely’.
    to quote Lord Acton.

    He learned this through many years of study and first-hand experience — He was a member of the House of Commons- a beehive of centralism.

    If you take his quote as a maxim you would could argue “concentrating power might be risky”. Which in my view is what this debate is mainly about.

    You don’t need centralisation to have smaller government and smaller bureaucracy. Reduce the size of the existing government. Advocate a strong civil society rather than burdensome government regulation that inhibits human freedom and stifles innovation and creativity. This can be done by reducing the size of government in relation to the GDP back to 25% this would give you $50 Billion pa in savings – Government was 6% of GDP at federation. See table 27.19!OpenDocument

    “The danger is not that a particular class is unfit to govern. Every class is unfit to govern.� another quote from Lord Acton. The bearded men were well aware of this when they fragmented power with the federal system at the turn of the century.

  11. ‘Power tends to corrupt, and absolute power corrupts absolutely’ – I disagree, rather I think it is more the case that:

    “Power attracts the corruptible”

    God had absolute power when he created the world and he wasn’t corrupt, but that is because he isn’t corruptible at all.

    I can’t argue much with you because I largely don’t understand your post, but I can examine this:

    “You don’t need centralisation to have smaller government and smaller bureaucracy”. What about duplication? We have 6+ times the number of bureaucrats we need, administering 6+ different systems which are incredibly similar. We could even keep the state level of government, but we only need one state, not 6+.

    So even excepting the ‘Joh’ argument, which would have merit to Joh haters, we can keep our state, without costly duplication, which would bring down the size of ‘gubment’ considerably.

  12. Benno,

    O.K. we have some common ground on a sort of nexus between power and corruption.

    John above describes an “overweening national government needing federalism to vote against it” This is a polite way of saying that the national government is flexing to much power and we need the other levels to counter this power.

    If we were to adopt your proposal and upset the status quo this would deliver more power to the national government. This is what the supporters of federalism are afraid of as it would mean more power in fewer hands (see Actons quote above). In my view their fears are warranted.

    Is the motivation for the abolishing one level of government solely to save money and create efficiency or is it about changing the mix of power?

    To draw from your post:
    We have 6+ times 300,000 bureaucrats we don’t need, administering 6+ different systems which are incredibly similar that in my view we need.
    If the motivation is solely to save money and create efficiency why cant it be achieved this way?

    We could reduce to 6+ times 100,000 bureaucrats we need, administering 6+ different systems which are incredibly similar that we do need.

    As I have stated before, we operated in the 1970s with a federated public sector costing 25% of the economy. Life was O.K. back then.


  13. Benno / Benny,
    ‘All power tends to corrupt’ means he same as ‘power attracts the corruptible’ if you accept that all of us are corruptible to a greater or lesser degree. The more power you put in anyones’s handa the more corruption you are likely to see. The reason why most of the wealthy countries around the world are either small or federations is that these factors greatly reduce the scope for corruption. The problem with government in Australia, IMHO, is not that there are too many governments it is that one of the governments tries to exercise undue power over the others, using (inter alia) its revenue raising powers. Fix that, reduce the Federal government down to the areas it should be doing and let the States do the rest – as well as raising their own taxes.

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