Federation foibles: ‘game playing’ in policy, says Sturgess

The federation is in need of reform, says former state bureaucratic leader Gary Sturgess — but we need to be realistic about exactly what can be achieved.

Perverse incentives and blurred lines of responsibility create problems in the running of the federation, says Gary Sturgess, former director-general of the NSW Cabinet Office under then-premier Nick Greiner — but the solution should focus on greater co-ordination, rather than just transferring power to the states.

The problem, he says, is that the current federal boundary lines “encourage game playing” in social policy. In particular, the way health systems are divided between the Commonwealth and states is “bizarre to the point of gross irresponsibility”.

“The federal government has the money, and federal politicians want to announce nice things for the electorate,” he said in conversation with The Mandarin. “Kevin Rudd said to me the issue on which he had the most frequent representations from his electorate were pavements, which is a local issue.”

The funding of the states is a problem. Sturgess argues that because the states lack access to reliable sources of funding “they mess around with pricing for services and you end up with bizarre incentives.” Part of the solution would be to weaken the vertical fiscal imbalance by giving states access to broad-based taxes, he says.

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