Because the government regions aren't directly elected there's a reduction in the quality of democracy. We could fix that problem to some extent by letting the regions be directly elected, which leads toward the federal structure Australia has today.

Also, the multi-function nature of the regions means that we're forced into a "one size fits all" approach when fixing the regional boundaries. A police region, for instance, may need to be a particular size, and be chosen to have natural boundaries in terms of transport or settlement patterns. An environmental protection region, on the other hand, may need to be based on watershed boundaries and be of quite a different size. The obvious solution to this problem is shown on the next slide.

The problem is that if we try to apply both solutions we end up electing huge numbers of regional authorities, which is too much to ask of the electorate. Even if it is done, each elected figure will feel they have a mandate, and when they disagree with other elected figures over demarcation the referee's job is likely to be messy. So the two solutions are in practice likely to be inconsistent with each other, and we're stuck with one problem or the other. Of course, having to choose which problem we suffer is still not as bad as suffering both, which is why I see this solution as a thought-experiment rather than a practical model.