The current health crisis impacting each corner of the earth has forced governments to act swiftly. Unsurprisingly, this has resulted in confusion in nations where citizens are under the authority of multiple leaders who give different instructions. This has been the case in Australia, and this is the danger of federalism.

Federalism, in the Australian context, means a division of powers between the federal government and the states. Federalism seeks both to divide power to prevent its abuse and place government in a local context, allowing community issues to be prioritised.

Australia federalism requires cooperative federalism, where different levels of government consult and collaborate in developing policy solutions to their common problems. However, the original design of the Australian Federation provided few mechanisms that enabled cooperative federalism. Therefore, Australia has devised various pragmatic arrangements enabling governments to work together that have broadened over the years. These include COAG (Council of Australian Governments), ministerial councils and specialised commissions. Although these bodies encourage collaboration among federal and state governments, these arrangements are vulnerable to political pressures and to alteration when a new party is elected as it is not part of the Constitution.

Another issue with Australia’s federation is pronounced levels of vertical fiscal imbalance. This is a situation that arises in a federation where one tier of government lacks the revenue-raising capacity of the other and relies on grants to meet its policy commitments. Due to a series of high court decisions regarding taxation, the states have been left with a limited capacity to raise revenue, impacting their ability to create change within their jurisdictions. Priority is given to the federal government, and this diminishes the role of state and local governments, leading to immense inefficiency.

The Business Council of Australia that calculates the inefficiencies within the federation sees government waste over 9 billion dollars each year. This already high cost is exacerbated by contradictory messages by government leaders. Federal and state leaders are not required to give the same instructions as each other, often leaving citizens confused. There is an appropriate argument that Australia is over-governed, and the current challenges we are facing as a nation require a uniform response.

During the COVID-19 pandemic, the over-governing of Australia has been clearly presented. While Prime Minister Scott Morrison provides particular instructions to Australian citizens, each State Premier then put their own spin on the Prime Minister’s comments, creating confusion in the community. While Scott Morrison said that schools would remain open, but parents could keep children at home if they wanted, NSW State Premier Gladys Berejiklian stated that those who could keep children at home should do so. For a parent living in NSW whose instructions should they follow?  These mixed messages resulting from federalism has made people more concerned about what the guidelines are regarding getting a haircut, then the importance of social distancing.

Federalism can be dangerous. Every politician in each branch of Australian’s federation has a powerful and influential voice. At any time, one citizen can be given multiple different instructions from government leaders, leaving them confused and unsure of what direction to take. When this occurs, we often witness making their own decision, contrary to all instructions given.

I don’t believe that we need a complete reform to Australia’s federation, but we do need more effective communication among Australia’s local, state and federal leaders. We need to replace ad hoc intergovernmental processes and mechanisms with a constitutionally protected permanent institution which can untangle the mess of state and commonwealth powers.

State and local governments should not be dismissed and are an integral part of ensuring local matters are dealt with efficiently and appropriately. However, effective communication between leaders is vital in ensuring that Australia’s federation does not damage the country it seeks to protect.

5 thoughts on “The Danger of Federalism

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