Michael Lester, As the PM meets the Premiers …

The system we have in place now bears little resemblance to the Australian federation set up 105 years ago.

The Senate no longer protects the interests of the States. Over the years High Court interpretation of tax and other laws has increased the power of the Commonwealth vis-à-vis the states and we have had to adapt to rapid changes to world social and corporate structure and mass communication.

SOME time ago I wrote an article for TasmanianTimes (link to come) saying that the GST had been the Trojan Horse for Canberra domination of the states and calling for a national debate on the relevance of the Australian federation.

Unfortunately we have not yet had a proper public debate on the pros and cons of retaining the current six-state system.

Yet the recent outburst by Federal Treasurer Peter Costello (June 28, Financial Review) revealed exactly the point I was making — that Canberra had hoped to use the GST to recast Australia’s federal system.

Of course Costello puts his own spin on the issue and said the states were at risk of becoming mere divisional service deliverers for Canberra because they had squandered the opportunities that the GST revenue afforded them.

An opposite case could easily be made — that the Federal Government has sought to use the leverage of the GST to force its policy agenda on the States.

However, the issue of blame is not important.

Enormously important issue

Over the years, both Labor and the Coalition have used the Commonwealth’s powers to dramatically shift the federal-state relationship in favour of Canberra.

The future of our federation is an enormously important issue. It is far more important, for example, than the Republic push of the 1990s which, had it been successful, would have resulted in minimal change to our system of government.

Should we remain a federation and, if so, should we retain six states (what of the Northern Territory and the ACT?) or should we change to a system more like Britain’s with a central government and local government tiers only?

The question of finances and the roles of each level of government are central to the debate. The states no longer have a strong tax base. They traded off many of their former taxes and charges in return for the GST.

Over the years we have witnessed a blurring of the roles of the federal, state and local government and this urgently needs redefining to reduce duplication and to ensure the level of government delivering a service has the funds to do so.

The system we have in place now bears little resemblance to the Australian federation set up 105 years ago.

The Senate no longer protects the interests of the States. Over the years High Court interpretation of tax and other laws has increased the power of the Commonwealth vis-à-vis the states and we have had to adapt to rapid changes to world social and corporate structure and mass communication.

Our system of federation desperately needs an overhaul and I’d prefer to see that occur through public debate than to allow one or the other side of politics to decide our future for us.

Michael Lester is General Manager, CPR Communications & Public Relations Ltd, Hobart, a former Bacon Labor political adviser, and state political reporter.