The election that spelled the death of federalism

Dated but you get the picture …

Given that the most likely state of play in the House of Reps after distribution of postal and prepoll votes is 73 Coalition and 72 ALP or vice versa, we might yet witness a Labor minority government .  The Greens’ Adam Bandt and independent/Green Andrew Wilkie will support an ALP government giving Labor 74 seats to the Coalition’s 73.  One might think that the Coalition will certainly be able to do a deal with the 3 conservative-leaning Independents Tony Windsor, Bob Katter and Rob Oakeshott but it might not be that simple.  Windsor and Oakeshott are both National Party rejects who hate their former party with a passion.  That’s especially true of Windsor who even gave some support to the minority Labor government of Bob Carr back in the 90s as a State MLA.  Julia Gillard proved herself very capable of cobbling together unlikely ad hoc coalitions by steering through Labor’s IR and educational reforms so one certainly shouldn’t discount her prospects of doing a deal with one or two of the conservative Independents.  Northern NSW looks set for an orgy of expedient pork-barreling in any event.

Election analysts far more knowledgeable than I will be examining these immediate developments microscopically over the next week or so.  I want to focus on what I see as the wider significance of this election.  The conclusion I draw is that it spells the collapse of any coherent distinction between federal and state issues.  It is abundantly clear that the States which registered major anti-Labor swings (and delivered seats to the Coalition) were those which are waiting for their Labor state governments with the proverbial baseball bat:  New South Wales, Queensland and to a lesser extent the Northern Territory. In other states where anti-state government sentiment is weaker or non-existent, voters were able to concentrate on traditional federal macro-management issues and rightly concluded that this had been a fairly good government which at least deserved a second term in office.

It has long been a truism that Australian voters can readily distinguish between state and federal issues.  But that certainly wasn’t the case this time. In Solomon where I live, the big issues were the dearth and high cost of housing and the perennial of laura norder, both clearly traditional state issues. However, the Gillard government effectively reinforced the perception that these were actually federal issues by promising 1200 affordable housing units, a GP super-clinic, trade training centres etc.  The CLP won in Solomon because it more effectively tapped into voter unhappiness in these areas and succeeded in blaming generic Labor for them. In other marginal seats Labor promised multi-billion dollar suburban railway lines, more super-clinics, more trade training centres and so on.  Both parties gleefully dispensed CCTV camera networks for any marginal seat where residents perceived themselves as suffering crime problems.  In the circumstances you can hardly blame the voters for failing to make the distinction between federal and state issues, and it’s only a short step from there to blaming the incumbent federal government for the failings of its state counterparts.

More importantly, voters’ failure to make a federal/state distinction reflects a deeper constitutional and practical reality.  Under Australia’s evolved system of governance the federal government really does control the states.   The Howard government signalled that reality decisively with its Work Choices takeover of the nation’s industrial relations system and Labor retained that central control with its Fair Work regime, and compounded both the perception and reality of an effectively unitary system of government with its Murray-Darling basin water scheme, Rudd’s coerced health and hospitals deal and Gillard’s Education Revolution.  If the federal government controls industrial relations, health, education and transport, as it manifestly now does (or can whenever it wishes), why shouldn’t voters blame and punish an incumbent federal government for the failings of its state minions in those areas?

The big problem that Rudd/Gillard experienced lay in having to rely on increasingly dysfunctional state bureaucracies to roll out urgent major federal programs, a couple of which turned into public relations disasters as a result.  The evident lax supervision and oversight of the GFC Stimulus pink batts and school halls/tuckshop programs were essentially failings of the relevant state government bureaucracies.  Australia’s federal system has reached a state of transitional decay whereby the Commonwealth has acquired all the funding and many of the levers of control for all governmental functions, so that the people not unreasonably expect it to deliver all manner of services satisfactorily, but continues to devolve operational control to chronically underfunded and therefore increasingly incapable and debilitated state bureaucracies.  The Commonwealth currently doesn’t possess its own operational bureaucracy to actually run any major area of traditional state responsibility.

The fascinating (and in some respects disturbing) question that will arise once the parties fully digest the wider implications of yesterday’s result, is how they will react.  There are three obvious possibilities:

  1. Restore the States’ fiscal base and return real control of traditional state functions to them (or more likely some modified suite of functions deemed more appropriate to the twenty first century).
  2. Move towards more effective central micro-management of state-based bureaucracies.  The current system of federal control of universities is an obvious (if depressing) model.
  3. Devolve operational control to ostensibly non-political local school and health boards with the Commonwealth merely delivering funding and exercising a much more (apparently) minimalist form of control whereby it can easily avoid being held responsible for service delivery failures at local level.  Rudd’s original model for hospital reform was along these lines.

The major problem with the third option is that it is very likely to result in increasingly wide disparities in the quality of service delivery across Australia, thereby engendering increasing inequality of opportunity.  The rich will get richer faster and vice versa, a phenomenon long evident in the US.  The Coalition’s vision for the future of Australian governance, both under Howard and in prospect Tony Abbott, lies very much along this third path.

How a re-elected minority Labor government would respond is less certain.

Update – Shaun Carney comes up with a similar analysis in the SMH.

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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Richard Tsukamasa Green
Richard Tsukamasa Green(@richard-green)
11 years ago

One of the questions I have with the (otherwise compelling) hypothesis that Federal Labor is being beaten with the baseball bats intended for state Labor is that, in NSW at least, these bats were out as far back as 2006, we frustrated by the lack of an alternative in the 2007 election and were well and truly polished and ready to swing all the way through the period in which the Rudd government had stratopheric support. This included the byelections in Cabramatta and Ryde where the state government was pounded whilst the Federal Government was swimming along cheerily.

From that I have to think that if the baseball bats analogy fits, something must have changed in 2009-2010, either causing a blurring of fed/state boundaries , or a reemergence of this blurring (the latter seems more likely).

Ian Milliss
11 years ago

Have a clear look at the result.It was a vote for greens and informal and only incidentally for the coalition. The NSW and Qld Labor govts will get the kicking they deserve in due course but this was about federal issues like climate change policy.

Moz
Moz
11 years ago

I suspect the clincher for many people was Gillard cheerfully stepping into the rail morass and saying “yes, we want you to see us as a part(ner?) of the state Labour government”. FFS, state Labour have spent 10 years digging themselves a shocking infrastructure hole and they’re universally reviled for their mismanagement. Even a mediocre political strategist would have suggested using a very long barge pole and being ready to drop it and run at the slightest hint of trouble. If Gillard had said she was going to take over the NSW railways she probably would have got a better reaction, even from the “state’s rights” purists.

James Farrell
James Farrell(@james-farrell)
11 years ago

A persuasive analysis, Ken. Another aspect of the blurring of state and federal issues is the role of the ALP party machine as opposed to the respective governments per se. In NSW the public perceives to its frustration that leaders come and go at the whim of shadowy apparachiks; when they saw this model being extended to the federal sphere, they rebelled. There were also Victorian apparachiks involved in the coup against Rudd, but it doesn’t seem to have affected Labor’s vote in that state; it seems a reasonable hypothesis that this is because their meddling in state parliament hadn’t reached the outrageous level it had in NSW. I could of course be talking through my hat.

James A
James A
11 years ago

The independents and both leaders are talking about parliamentary reform because of the rejection of both parties. Perhaps this could be parlayed into fixing the VFI, which would be my preference of your three options.

Some possibilities that come to mind would be giving the mining tax revenue directly to the states, and reintroducing state personal income tax.

Stephen
Stephen
11 years ago

Ken, I’m not so pessimistic about people’s (in)ability to separate governments.

I think Chris Uhlmann summed the situation up perfectly on Insiders this morning when he said:

[The ALP] always had a structural problem with their campaign because there are four things you can run on: your leadership, your record, your policy, or your party [brand]. And name one of those things wasn’t tainted by getting rid of Kevid Rudd…

The problem with NSW and Queensland wasn’t that people confused federal and state issues but that the Labor brand had been so badly tainted there. Ultimately ALP candidates and policies are all developed through the same backend and the Libs successfully linked the “machine” that controls candidates at both the State and Federal level as being the cause of poor performance.

Federal Labor’s obsession with promising things that are the traditional responsibility of the States was also a mistake — but not because of some blurring of the distinction. The problem is that the Federal Government has a really poor track record of delivery at the micro level. And ultimately it was promising things that weren’t or couldn’t be delivered (FuelWatch???), or were delivered badly (batts), that made the ALP’s record so vulnerable to attack.

Butterfield, Bloomfiled & Bishop
Butterfield, Bloomfiled & Bishop
11 years ago

Getting rid of Rudd when in a winning position meant no incumbency advantage and with Gillard campaigning most but not all the time as an Opposition Leader Abbott was not the central point of the campaign which meant there was little pressure on him.

This meant he didn’t have to answer questions much on economics like his party’s very dubious election costings.

Gillard also could not explain very well why she HAD to take over from Rudd.

It shows those machine men know very little about politics.
Neither campaign team was good but the Alp’s was much worse.

For those who theorise it woz the States that did it, why did Tassie swing to the ALP then?

Butterfield, Bloomfiled & Bishop
Butterfield, Bloomfiled & Bishop
11 years ago

whoopsy,

The leaks were very damaging as they showed a party divided indeed one ALP person did not want the party to win.

observa
observa
11 years ago

Annabelle Crabb on Insiders nailed it with the Libs full page ad pasting up Julia’s big train announcement with a picture of her and Kenneally smiling together. As A said you know its a goner when your opponents bung it up as an attack ad and at the very least Julia should have shown up with an engine or something. Says it all really. Seems like the areas where rapid growth and infrastructure shortfalls coupled with ‘all show and no go’ Labor really nailed them, with WA worried about a specific mining tax grab, which would have impacted local state royalties in that regard. WA wasn’t letting go of its GST the smarties.
Contrast that with Vic, SA and Tas with steady as she goes State Labor. Not saying we don’t have big wish lists in SA but the Rann govt doesn’t get too far ahead of itself, apart from the Adelaide Oval ‘vision’ at the last election and that cost them when the figures definitely looked ropey and was subsequently revealed post election. Treasurer Foley ‘forgot’ a conversation with the SANFL where a blowout was mentioned and the punters are calling for his head since. They’re pissed off with Wong too and the promise to fix the MDB, but know the Libs can’t do any better so no big deal electorally.

I’ve said before Labor ‘own’ the environmental concern and more often than not will be ahead of the Libs PROVIDED they can get the economy right. Get that bit badly wrong and the tables are quickly turned. It’s an occupational hazard for restless lefties always into grand plans, visions and wanting to move forward. It’s called unlimited wants and limited means by which to satisfy them dummies. Notice how they can get away with motherhood statements and green platitudes though, as long as they’re not too real and too costly.

observa
observa
11 years ago

Here’s the deficit ticking time bomb for them though, if they get too regular and too dribbly with the Greening vision thingy-
http://www.adelaidenow.com.au/news/south-australia/brace-for-brutal-cuts-in-budget/story-e6frea83-1225907479643
Unlimited wants/limited means and the Great Moderation is over guys.

Ingolf
11 years ago

Ken, like you (if I’ve understood you correctly) I think the third option looks by far the most interesting. At least in theory. Since it’s also hard to imagine the Commonwealth reversing their growing ascendancy over the states, it’s probably also the only realistic possibility for greater decentralisation.

Would you mind expanding a little on why you think any such move would be likely to lead to increasingly wide disparities?

Richard Tsukamasa Green
Richard Tsukamasa Green(@richard-green)
11 years ago

Ingolf – The spending that a government spends on services is proportionate to the amount it can raise in tax revenue, which is a result of the incomes in the government area, which is the result of the services. State and Federal governments cover a wide range of socioeconomic regions, but should smaller groupings become more common -increasing mobility between them for those that can afford it – education spending for instance, will be higher in areas where income is already concentrated. This would draw more higher taxpayers from poorer regions, causing further cuts in the poorer regions and further middle class emigration whilst also producing a subsequent generation that won’t pay enough tax to fund an education for their children. This is the phenomenon Ken is referring to in America.

I don’t see revenue raising being decentralised however (aren’t taxation rights very jealously guarded?), so a funding system would probably be closer to a per capita funding, so richer regions will still subsidise poorer ones.

I do think this can lead to increasing inequality though. School districts could request voluntary donations that could lead to a (further) concentration of people that can afford them as the wealthy create their own commons. Also possible (and more likely I think) is that the benefits of local administration include response to local pressure. In any population, the amount of people who feel the entitlement (I mean this without negative connotations) to pressure for better services and have the drive to do so is quite small. They’re also disproportionately middle class. Where is an above average number of such people, the services will be better and house prices/rents in the district will start pricing the poor out, with similar dynamics to the American experience.

Ingolf
11 years ago

Thanks Richard.

I accept the problems (and potential dangers) you outline in the last paragraph (like you, I see little no chance of revenue raising being decentralised). Still, if distributions are made on a per capita basis, wouldn’t this go a long way toward providing a fair and equitable baseline? You’re undoubtedly right that more wealthy areas would supplement these distributions but I don’t see that we should even try to prevent local communities from making their own voluntary contributions to further raise standards.

You’re probably also right that more well off communities would lobby hard to boost their relative share of distributions, but isn’t this tug-of-war an inevitable part of democratic politics? Won’t the question of whether they succeed or not ultimately be a reflection of the nature of our polity rather than something inherently bound up in the devolution of operational control?