Australian Federalism

This essay will outline the issues discussed during the ‘Policy Roundtable on Federalism’ hosted by the Academy of Social Sciences in Australia (ASSA) and the Institute of Public Administration Australia (IPAA) on the 17–18 May 2007 and will explore their impact on federalism and provide possible steps to overcome them. The Roundtable discussion made it apparent that Australian federalism is dysfunctional and needed shaping up. The reasons included a combination of external and internal factors and pressures. The pragmatic reform process could address these factors and pressures to improve Commonwealth-State relations. This could achieve enhanced policy outcomes for the Australian community and provide a system of government that “delivers the Australian people the opportunities they deserve” (Brumby 2008). David Black (1998) describes federalism as ‘the process by which the Commonwealth of Australia was formed on 1 January 1901, was unusual then, and still is”. The federal system has provided a relatively stable cooperative form of government, however, changing demographics, global pressures and fiscal situations within government have meant that the system is now seen as being in a malaise and in need of repair (Wanna 2007). The modernisation and globalisation of markets, media and communication has eroded regional identities in Australia. In the past the Australian states were protected from a centralised form of federalism but as modern technology reduced the physical distance institutional barriers were decreased. These global pressures mean that Australian states risk becoming agent providers for a central government (Wanna 2007: page). Increased activity has resulted in hyper-interaction involving all three levels of government. Additionally, lack of cultural regions in Australia unlike most other federations meant lack of regionally based governance system (Wanna 2007: 276). Australia retains a highly centralised fiscal system, holds a high