The COVID-19 crisis could be a shift point in the Canberra view that effective government in Australia requires the inexorable takeover, even by stealth, of state responsibilities by the Commonwealth.
The trend since federation has been centralisation and the steady diminution of the states at the expense of the power and prestige of the Commonwealth. Think centralisation of income tax in the second world war. Centralisation of a broadening range of social services from the 1970s onwards. Centralisation of instruments, rules and institutions in economic domains like competition, workplace relations and environment protection. Indeed, the global financial crisis reinforced the view in Canberra that it is national instruments and approaches that matter.
The COVID crisis rebuts the view that federation is a one-way street to the centre. The crisis has made clear that the states own the primary legal instruments and tools of enforcement for law and order, public safety, hospitals and schools. To date, the exercise of these responsibilities by the states has worked. The Commonwealth has in turn used its instruments well – notably its control of the nation’s border, its active and targeted use of the national budget and balance sheet, a national central bank that can buy government bonds, and its national convening authority through the creation of national cabinet. The combined responses of the Commonwealth and states have been complementary and mutually reinforcing. They have revealed a functioning federation.
Before we get too carried away, we should recognise that the federated response might not have worked. Outcomes are not deterministic. For example, if individual states had sought to replicate the New Zealand approach and separately define and enforce their own narrow lists of essential activities, then the risk of a break down in national supply chains of food and key items across the federation could have been much greater. Had this risk materialised, then the states could have been seen as undermining the national interest in a pandemic. The national cabinet has moderated unilateral action by states because the crisis has revealed the deep interdependencies in people’s lives and livelihoods between states. The national cabinet, too, has moderated unilateral action by the Commonwealth because it has shown the limits of Commonwealth power and knowledge. More generally, the national cabinet provided a political foil to intense public pressure on each jurisdiction to ramp up action and prove it was doing everything it possibly could. Of course, the response has to continue to work as contact controls are eased.
This new sense that the federation can work presents the national cabinet with a remarkable opportunity for better government and public administration, particularly in the quality of services provided to the Australian people. The debate about COVID-induced reform has been dominated by tax and market reform. Service delivery by governments should also be on the agenda.
It is a serious weakness of our system that Australians largely have to navigate for themselves the complexities of Commonwealth and state public administrations to get the services that their governments provide. Sadly, there are a lot more people doing that now. If governments can work together in the national interest, as the national cabinet shows they can, then why not take the ambitious big step to fully integrate the services they provide to individuals. There is a long history of work to improve service delivery across all jurisdictions and, in recent years, NSW has led the way in integrating state government services, first with Services NSW and then the creation of a Department of Customer Service. The Commonwealth has sought more integration of Commonwealth human services with Services Australia. But collectively it still falls short. The national cabinet has the opportunity to set an objective for fully integrated service delivery for the people of Australia across government by 2030 or even 2025, with trials, steps and increments to that objective.
Services can be delivered digitally, in call centres and through person to person contact – and all are important to meet the circumstances of individuals. There is huge promise in digital technology and data analytics to integrate and improve some human services. Indeed, COVID-19 has shown that some services thought to require personal contact can be delivered digitally, at least partially, with remarkable stories of innovation by public servants in health, communities and justice. Widespread, integrated and flexible digital service delivery would require significant and strategic investment by the Commonwealth as well as the states. The Commonwealth, for example, could fund digital transformation by reprioritising existing spending on the public sector (radically simplifying hierarchy and process and reducing duplication with the states), supported by changes to its bureaucratic structures that drive genuine and broad-based transformation.