John Brumby: COAG 'last bastion of unreformed governance'

By David Donaldson

October 26, 2015

John Brumby
John Brumby

Australia’s federal political arrangements are its last bastion of unreformed governance, believes former Victorian premier John Brumby.

Repeating calls for an independent secretariat and pre-agreed agendas for the Council of Australian Governments, Brumby says that the five years since he was in power had really driven home the “anachronistic” structure of COAG relations.

“I’m on a lot of boards — business boards, super boards, not-for-profit boards. Most of them have dramatically improved their standards of governance over the last 10-20 years — it seems the last empire, the last bastion of unreformed governance is actually our federal political system.”

Noting that COAG agendas tend to be set a week out from the meeting — an improvement, at least, on the old premiers’ conferences, where agendas notoriously were slipped under hotel room doors the night before — Brumby says its time to reconsider agreed forward agendas.

“If you’re on a business board, you spend at least a day or two days every year talking about strategy and getting the strategy right, and you have an agreed forward agenda on at least a quarterly basis. You know the big strategic issues you’re going to discuss. COAG doesn’t do that.”

The former chairman of the COAG Reform Council has continued to push for reform after leaving that role, suggesting that body, or something similar, should be reconstituted to monitor future reforms.

He says its important that an independent party measures the progress against KPIs and agreed milestones for cooperative agreements between the Commonwealth and the states. “When you look at most policies at state or federal level, or indeed Commonwealth-state, it’s often the case that the policy is right, but the implementation falls down or fails or is too slow. So what gets measured does matter.”

There is probably room there for a rewriting and refreshing of the intergovernmental agreement on Commonwealth-state finances, he added.

Brumby has revisited his appeal for reform at several public sector forums, including the Victoria’s Public Sector Week and this month’s national conference of the Institute of Public Administration Australia.

GST could help restore state funding

It is “inevitable” the GST will be increased — and that’s good policy — Brumby says.

More GST would allow for a simplification of the grants scheme, an idea he discusses in his new book, The Long Haul: Lessons from public life.

“One of the things that I say in my book is that if you were to increase the GST in future, say 15%, one of the things that you could consider is just taking a permanent pot out of that, say $5 billion out of $30 billion, and just making that available to the needier states on a permanent, annual, ongoing basis,” he says.

“Then you probably wouldn’t need the Grants Commission, as much as they do an excellent job, and then you could re-allocate, or allocate, all of the remaining GST pool on a per capita basis.

“That would give the state more flexibility in terms of the revenue they receive, rather than having more of it locked up in tied grants.”

This could be part of a broader shift in favour of the states, though politicians should make sure the process of federation reform did not become hostage to partisan debate between the Commonwealth and various states.

It will be important to agree that “Commonwealth-state reform will be a significant element of a wider reform program that will touch on tax, innovation, R&D and regulation,” he argues.

“This is one element of it, but it’s an essential part in terms of improving efficiencies and value for money for the taxpayer’s dollar.”

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