Business leader David Thodey will chair a heavy-hitting panel convened by the New South Wales government to review its financial relationship with the Commonwealth, having just spent much of the past year reviewing the federal public service.
The big names brought together by NSW Treasurer Dominic Perrottet represent a powerful combination of intellect, influence and experience of how the federation functions to try to give all Australians a roughly equal standard of living by evening out the intrinsic economic and historic disparities between different parts of this vast continent.
Thodey will be joined by constitutional law expert Anne Twomey, former federal department head Jane Halton, former deputy prime minister John Anderson, University of Melbourne economics professor John Freebairn, and New Zealand’s immediate past prime minister, Bill English.
Perrottet says his Federal Financial Relations Review will be a “groundbreaking” exercise that will “develop practical and achievable proposals for reforming the funding relationship between NSW and the Commonwealth” but people in other states and territories could reasonably be concerned that it will be a vehicle for parochial NSW-centric demands that come at the expense of less wealthy and economically vibrant jurisdictions.
“This is a highly-credentialed panel of experts with knowledge across government, public policy reform, federalism, economics and the law,” Perrottet said.
“I am very grateful to each of them for taking part in what will be a very significant project, one which will help re-define how NSW interacts with the Commonwealth and ensures the revenue system remains fit for purpose.
“We want a simple, fair and sustainable relationship which delivers a predictable outcome for NSW over the economic cycle.
“At present, there are a large number of complex agreements in place, and funding for NSW and other states can also vary significantly due to matters beyond our control like the distortion of GST returns caused by a mining boom.”
The panel will produce an initial discussion paper, run consultation processes and produce a final report in the first half of 2020.
Thodey is also chair of the CSIRO board and the Australian Public Service review, the latter of which has all but completed its work and is expected to produce its final report imminently after reportedly receiving some late guidance on what Prime Minister Scott Morrison would like the independent panel to recommend.
Morrison asked the review panel to “take a tougher line on performance standards” and “bolster some of the recommendations to reflect his demands that the public sector lifts its game in terms of service delivery and the provision of strong advice”, according to the Australian Financial Review.
John Anderson will bring a focus on rural and regional Australia to the table and Bill English will have plenty to say as a former NZ finance minister with considerable experience in several senior parliamentary roles. The two professors are leading experts in highly relevant fields: federalism and government tax and transfer systems.
Jane Halton will bring her experience of federal budgets and the Commonwealth’s financial relationships with the states and territories as a former secretary of the federal Department of Finance and the Department of Health, which represents the Commonwealth in a sector where most of the heavy lifting is done at state and territory level.
Professor Twomey is director of the Constitutional Reform Unit at the University of Sydney and one of the nation’s leading experts on how Australia’s federation has been governed over the years. Freebairn is a microeconomist with deep expertise in public finance and microeconomic policy.