National Regime's a Thin Argument

Australian Financial Review, 8th October 2004

What a striking contrast - the AFR's Economics Editor, Alan Mitchell, supporting the Howard government's centralist approach to federalism and arguing that no regional government should be left to "make decisions that significantly affect the welfare of people living outside their jurisdiction" while the eight Labor heads of states and territories complain that the federal government under Mr Howard has "gone further than any prime minister in recent memory" in working against them (6 October).

The heads argue for greater federal cooperation with their own governments. But neither they nor the Opposition leader provide any substantive basis for supposing that proposals for further federal intervention under Labor in education and health would overcome the inevitable policy differences. They also fail to answer the justification often used for federal intervention, viz that the quality of states services is lower than in the private sector and is heavily constrained by union-imposed conditions.

Mitchell's case for federal intervention, however, would not justify a radical change whereby states became mere administrators of policies determined in Canberra. Can it really be said that the welfare of people living outside Tasmania is significantly affected by how much of the old growth forests is preserved? Whether it be hospitals policy for over 75 year olds or old growth forests, the case for a nationally determined regime seems thin indeed.