Reshaping the nature of federation – The Select Committee

By Chris Johnson

Tuesday July 7, 2020

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Some things never change, while other things stay the same. Or so the old saying kind of goes. Despite such made up wisdom, conditions are ripe to ask ourselves — and ask of our elected representatives — if indeed it is time for things to change. Should ‘politics as usual’ be relegated to a not-so-fond memory?

If the pandemic experience we are living through has warranted a new level of cooperation, what is to stop such goodwill being adopted more fully? Party allegiances, for one thing. State and territory borders for another, perhaps. Yet we live in interesting times. Is it, in fact, time to take a fresh look at our federation?

We have asked this of members of The Select Committee – The Mandarin Brains Trust.

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More specifically, we asked:

Has the experience of the COVID-19 pandemic shown that the time has come to reshape the nature of federation and manage bigger national issues in a cooperative way between the federal and state/territory governments?

The responses that follow here are insightful and instructive. Helen Silver AO discusses the need for respectful engagement on important agendas; Ken Smith describes the requirements for a willing participation from the community; and Geoff Gallop AC brings this column home with a mini thesis that examines both international experiences and domestic precedents.

Helen Silver AO

Helen Silver AO is Allianz Australia’s chief general manager, Corporate Governance and Conduct. Prior to joining Allianz Australia, Helen had spent more than 25 years in executive roles in the Victoria and Commonwealth public sectors, culminating in the position of Secretary of the Victorian Department of Premier and Cabinet.

“All participants deeply involved in driving strong national reform know it is crucial to have an effective Federalism model for negotiation and engagement. The enthusiastic support for the national cabinet by all leaders is a crucial first step for any successful federalism model.

Helen Silver

“First ministers and their officials are demonstrating the highest levels of professionalism in managing this extraordinary difficult crisis caused by the current pandemic.

“Managing a crisis that has a clear single objective and urgent timelines is a quite different proposition for managing complex long-term multi-faceted national problems with often conflicting objectives and perspectives. The effectiveness of the national cabinet in providing a forum to manage the crisis response to the pandemic does not predetermine it will be a better basis for managing big national issues than previous forums.

“A key characteristic of a successful long-term federalism forum is collaboration. There needs to be a sharing of roles and responsibilities for the management of the national cabinet. Collaborative and respectful engagement on agendas, papers and briefing processes is a prerequisite for successful long-term policy development and agreement on big national issues. These processes can be expected to be quite different from the crisis management mode currently operating in the national cabinet.”

Ken Smith

Professor Ken Smith is the CEO and Dean of the Australian and New Zealand School of Government (ANZSOG), and Enterprise Professor at The University of Melbourne. Ken served for more than three decades in the Queensland government, including as Director General of the Department of the Premier and Cabinet between 2007 and 2011. Additionally, he has had diverse public sector experience from roles in NSW and Tasmania.

“The success of the national cabinet reminds us our federal system can quickly and effectively develop national solutions, supported by public service and external expertise, that can flexibly respond to diverse communities. The obvious challenge is in making this work beyond an immediate crisis response.

Ken Smith

“When creating new structures and abolishing old ones, we need to think more fundamentally about the most effective way for sovereign governments to interact – this may not always be through cooperation, competitive federalism remains important.

“In  setting up new structures, we also need to  establish the foundations for contestable advice provided to first ministers. We need to determine how the institutional structures supporting the federation can more seamlessly relate to each government’s cabinet and their accountability through different parliaments and  the communities they represent.

“Effective governance relies on willing participation from the community. Globally, COVID-19 has demonstrated that governments are  powerless if they don’t consider all advice and  work in partnership with community, thus ensuring both mutual obligation and maintaining a  relationship of trust. Bypassing that relationship means governments erode trust and over time lose the moral authority to govern.”

Geoff Gallop AC

Emeritus Professor Geoffrey Gallop AC was the 27th premier of Western Australia (2001-2006), he is the former chair of the Australian Republican Movement, and was director of the Graduate School of Government at the University of Sydney. Today he is a Member of The Global Commission on Drug Policy based in Geneva and is a member of the Friends of the Corporate Mental Health Alliance Australia. He chairs the Research Committee of the New Democracy Foundation.

Can a national cabinet find consensus?

“In some ways, the governance implications of COVID-19 were easy to handle as all the levels of government were agreed on the issue, namely the objective of keeping the virus out and preventing its spread by using the best advice available from within the public health bureaucracy. Agreement on ends and means wasn’t complete but sufficient enough to say that what emerged was a bipartisan and national approach that took us beyond the usual disagreements.

“Now we enter a new phase that still involves the prevention and containment agenda, there being no vaccine yet, but one that also involves efforts to open up and bolster the economy, first locally and nationally if not globally. To facilitate the co-ordination of efforts to create jobs it has been decided that the national cabinet will remain in place ‘to meet regularly and be briefed directly by experts’.

“There are lots of things one could say about the chances of the National Cabinet being able to deliver on the objective of job creation, both in the short-term without a vaccine and then in the medium and longer terms when we hope a vaccine is developed. Already we see the divisions on when and how far to open and grow the economy with advice coming in from all quarters, some within government and some from interest groups and think tanks. If the National Cabinet is to deliver in improving our national condition in these troubled times some sort of consensus is going to be required. So too I would argue a plan to back up this consensus that takes us beyond what we’ve come to expect of government in Australia.

“It’s well worth reflecting on what’s happened in Ireland, where, following a messy result from the February general election, the two long-term enemies of Irish politics — Fine Gael (35 seats out of 160) and Fianna Fail (38 seats) — and the Greens (12 seats) have forged a partnership in relation to both power sharing and what they’ve called a ‘Program for Government: Our Shared Future’.1 Each of the three parties conducted a ballot of members to ratify the agreement, which includes 12 major areas of public policy and provides for a number of Citizen Assemblies on, for example, drug policy and local government in Dublin.

“In the case of COVID-19 in Australia, there was a consensus that crossed party borders, and it involved a rejection of the laissez-faire approach promoted by a small group of ideologues, economists and epidemiologists, both here and abroad. On this key point, centre-right and centre-left came together, with the former conceding that change was needed from what were their normal views on the role of government in society and government. “Whatever it takes”, they said, and in this case that meant significant government expenditure to support workers and a wide-ranging program of regulation to deal with the virus.

“Back in the 1980s and 90s there was a good degree of consensus over micro-economic reform and competition policy. In this case, a centre-left prime minister joined with the premiers, some of whom were centre-right to bring about significant changes in the nation’s political economy, and away from what had been known as ‘the Great Australian Settlement’. Budget impact on the states were compensated when level playing field reform impacted revenue and industries and communities supported in the face of reduced protection. In this case, the biggest mover was Labor, altering as it did its long-standing assumptions about government provision and regulation, if not its views on the need for a fairer distribution of the burdens and benefits associated with life and work. Indeed, it’s important to note that Labor’s broadly representative national summit and its commitment to fairer taxation and social wage improvements were part of the deal that was struck and sustained, it didn’t just involve government and business.

“A new version of this micro-economic agenda came into being post 1996, but could hardly be described as a consensus position, the GST and industrial relations changes being heavily contested by Labor and its industrial base. No agreement there between centre right and centre left! The numbers were found for the new tax when the Democrats came forward with some compromises but the Coalition’s pursuit of the latter proved disastrous for their prospects, a change too far.

“However, towards the end of John Howard’s time in power, a form of consensus started to emerge in the form of the National Reform Agenda (NRA), a Victorian Labor government providing the intellectual case and organisational requirements. It involved, firstly, broadening out the reform agenda from its narrowly economic focus to one that involved human capital, social justice and environmental considerations as well and, secondly, creating a new and less controlling form of partnership between the Commonwealth and the States.2 Then, right at the end, an emissions trading scheme was accepted by the Coalition following a report by Peter Shergold.

Geoff Gallop

“This move to co-operate more had been helped by the coming together of the commonwealth and the states in developing a national strategy to combat terrorism. Both levels of government had relevant areas of responsibility — and both shared general agreement on the nature of the issues that needed to be addressed. Thus the consensus.

“Kevin Rudd came to power in 2007 with a comprehensive and polished up version of this agenda, included in which was action on climate change. It looked as though the nation could have its own plan, and one that involved agreement on objectives and how to measure them, whilst maintaining jurisdictional autonomy on the means to achieve them.3 However, it wasn’t to be. The Greens, now an important player, wouldn’t budge on certain fundamentals, Labor imploded and Tony Abbott was elected Liberal leader. A second version on climate post 2010 was impressive but lacked the authority needed to sustain it. Tony Abbott became prime minister, ditching along the way any notion of the NRA as proposed and developed by Labor, even with its attractive elements for the states. Put simply, the NRA was thought to have too much of ‘the social’ and too much of ‘the environmental’ when lined up against the all-important ‘economy’ and its requirements. Lacking this extra social and environmental dimension to what counted as a national objective the Coalition has battled ever since to create consensus for change.

“What we call ‘consensus’ is difficult but important when significant challenges are in play and changes to what is normal are needed. Parties may win elections but not convincingly, authority being just as important as power as the late Professor Gordon Reid used to emphasise to his Politics 101 students. In relation to the matters I have mentioned, we’ve seen enough of it to matter in the national cabinet around COVID‑19, the micro-economic reforms of the 1980s and early 90s and in relation to the response to terrorism. In other matters, such as the new NRA and its ‘triple-bottom-line’ or climate policy and its price on carbon, it started out well but then failed as ‘politics as usual’ took over.

“That significant degree of consensus is going to be needed if the national cabinet agenda to create jobs and build a damaged economy is to succeed. The COVID-19 experience should have taught the prime minister that the states and territories have their own constituencies and accountabilities and aren’t just agents of the commonwealth. So too he should note that whilst we may be virus and economy focussed, the volatile issues around inequality and climate are still in play, both inside and out of parliamentary politics. Such a consensus won’t be found simply by leaders invoking it following a meeting with the ‘usual suspects’ but rather by a genuine coming together of ‘outsiders’ as well as ‘insiders’.

“A national cabinet may be one thing. A national consensus and plan of action, however, is quite another. And, as we’ve seen from our history, including in recent days, that’s going to need more than commonwealth power, more than Coalition government and much more by way of community engagement. Don’t underestimate too, the role a properly convened and facilitated summit could play in the process, as Bob Hawke understood back in 1983.

“Prime Minister, the ball is in your court.”

Sources

1. For background and analysis see the two articles by Jeff Kildea in Pearls and Irritations: “The Irish Elections – are we there yet” (23 June 2020) and “Ireland has a new government at last” (1 July 2020). On the main points of the agreement see “Carbon, cycling and housing” in The Journal.ie News 15 June 2020.

2. See Victorian Government, A Third Wave of National Reform (August 2005) and Allen Consulting, Governments Working Together: A Better Future for all Australians (May 2004)

3. For a summary of the proposal see Geoff Gallop,” Australia’s Productivity and Participation Reform Agenda”, OECD Forum 3 June 2008. For an account of how this approach can be further developed into a national plan see Geoff Gallop, “The vision thing: we need a national Plan” in Miriam Lyons (ed.), Pushing Our Luck: Ideas for Australian Progress (2013).

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