Give states more power, more revenue: former top bureaucrat

The Commonwealth should gives states more power over decisions and revenue, argues former senior Commonwealth bureaucrat Vince FitzGerald. The federation debate has begun.

The Commonwealth should butt out of state-based service delivery, according to former senior Canberra bureaucrat Vince FitzGerald. The GST should be hiked and states assigned a proportion of income tax to pay for it.

FitzGerald, a self-described federalist and Melbourne director of ACIL Allen Consulting, argues “we have the most unbalanced federation in the world, with the lion’s share of the taxing power held centrally and used to ‘muscle in’ on areas which were constitutionally meant to be administered by the states — notably health and school education”.

He is critical of the Abbott government’s decision to pare back grants to the states for health and education over the next few years. “Without giving the states any enhanced ability to replace the funds,” he told The Mandarin, “the Commonwealth will hold back, it will push a significant part of its own budget problems onto the states.”

Mandarins are debating government relations and the division of responsibilities and funding as the federal government begins work on a white paper examining the federation. Last week, former top state bureaucrat Gary Sturgess told The Mandarin perverse incentives and blurred lines of responsibility are muddying the waters, but he called for greater co-ordination rather than a transfer of power.

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