Jim Snow - State : Federal Issues

Australians, like most citizens of the world, are critical of their governments. Many people do not know what governments do and many do not see how they can influence the political process. And when people have a problem, to whom do they go? As a federal MP I had representations from electors about problems like a neighbor's dangerous tree, train schedules, state roads and many other non-federal issues. What is federal? What is state or territory? What is local? The responsibilities are not always clear and are made more confusing when those in one level blames the other for neglect or are accused of taking credit for the successes of the other. Buck-passing and the blame game thrive. The confidence of people in their democracy suffers and a dangerous skepticism about democratic processes creeps in.

This paper examines just three years of records of the government party between 1993 and 1996 to illustrate the way in which the federal system impinged on efficient government between March 1993 and March 1996. It lists, with explanations, all mentions of the States and Territories raised by ministers or back bench parliamentarians in the government party room or Labor caucus during that time, in the briefs on 117 legislation bills and on 57 other occasions.

The comments have drawn on my 38 years experience in politics, 13 of them in the Commonwealth Parliament and, from 1993 to 1996, as Chair of the Labor caucus, the government party.

It seemed evident that uniform, national control was worth considering for many of the issues dealt with, rather than fragmented multi-government control. Other issues deserved uniform, national control with local options for decision-making or for administration or both. Finally, there were three instances where state and territory governments were convenient, though options proposed by reformers in the Beyond Federation network cater for all three.

At the conclusion of each reference the reader is asked to `consider' the federal implications of the record in relation to its positive and negative implications, including:

Overall, both Coalition and Labor state governments were able to substantially delay the implementation of government policy (for example dealing with the Murray Darling Basin water problems 2.20). The delays would have increased the cost of government.

Legislation often resulted from cooperation, coordination and repair, sometimes accompanied by unproductive effort and confusion about objectives. Add to those the time involved and, as a result, urgent measures in areas such as drought relief and rural assistance were held back.

While the states sometimes tried to counter federal power (industrial relations (2.14), compulsory student union fees (2.6), native title (2.1), for example), the Commonwealth was able to out-maneuver them. When they did not agree the states seemed unable to cause the Commonwealth to abandon or remove any important measures. Delay in implementation sourced to the states may have checked Commonwealth power but the legislation would finally pass.

It should be added that the frequency of elections, means that the people themselves are a check on federal policies. Industrial relations and the goods and services tax featured in the 1993 election campaign. Governments are judged by the consequences of their policies, if not the policies themselves, and democratic elections provide more decisive verdict than any protesting state government with their own interests to uphold.

Policy areas where uniform legislation covering the whole nation would increase efficiency, reduce unnecessary costs and enhance rather than inhibit democracy included defamation, therapeutic goods regulation, human rights and banking. Policy areas where uniform legislation was desirable but some decentralization options to areas smaller than those within state boundaries was needed included industrial relations, education, health, funding equity, and transport. Varying degrees of decentralized administration seemed desirable for many policy issues covered in sections 1 and 2, and essential for section 3 (offshore and shipping issues, crime, terrorism, dangerous chemicals).

In the following paragraphs I touch on each of the issues raised by government members where states and territories were mentioned. The object is to consider the effect of the federal system on good government, not to comment on the merits of the many policies. Nor is there any intention to select the best alternatives to the present federal system (whether two tier: national and local, two tier: national and regional or one tier, one way of explaining my own `shared government' proposal where Senators serve in both national and local sectors of government).

To help South Australia reduce its debt burden the Commonwealth agreed to provide the State Bank with $600million. The bank would have to be sold as quickly as possible consistent with a fair market price; the bank being brought into the Commonwealth's tax net, free of losses from July 1, 1994; and the bank being brought under the prudential supervision of the Reserve Bank of Australia no later than the same date. Minor amendments would streamline the transfer of assets to the newly corporatised Bank of South Australia, which was created in preparation for the sale.

This provided the legislative framework for the sale of the Commonwealth Government's 50.39%, $4.5 billion shareholding in the bank The sale would be exempt from State and Territory taxes, duties and charges but the Commonwealth would reimburse those jurisdictions with the amounts.

Consider the need for UNIFORMITY in the prudential supervision of all banks, the COST of arranging exemptions from taxes and charges and even of reimbursement procedures.

Chris.Haviland MP queried the justice in proposals for compensation reform bills. The proposals would deal with the high cost of compensation payouts. Assistant Treasurer George Gear said if public interest outweighed compensation then public interest would triumph. If an article in yesterday's Australian were only half right the benefits were so great, we would do it if the States don't.

Consider: DUPLICATION, with more than one level of government involved DIFFERENCES when different states seek different rules, the COST of trying to avoid those differences through inter-government negotiation. There is good reason for UNIFORMITY.

PETER DODD asked MICHAEL LAVARCH a question about a High Court's decision on defamation. We don't want a Gennifer Flowers situation in Australia, he said, referring to one of President Clinton's sex accusers. The Attorney General said the decision had implied the right of freedom of political discussion, that there is no action for defamation unless the remarks are known to be false or reckless, with no attempt to seek comment or where the circumstances of the particular case are shown to warrant action. A case like Flowers may be regarded as private and of no relevance to performance of public duty when a court looks at the matter on its merits. In politics, discussion is seen as essential for democracy and the laws should not prevent that. He was arranging discussions with state Ministers to see if their laws could be brought into line with the High Court. MPs are now far more vulnerable to personal and media attack.

Consider the savings in COST from having UNIFORMITY with only one government involved, the CONFUSION and uncertainty arising from DIFFERENCES involving nine different governments. One person's life savings or another's reputation could depend on which state was the scene of defamation.

Most of the states and territories had agreed to confer testing of samples for unlawful drugs or doping to the Commonwealth agency. It gave tested competitors federal appeal rights and ensured entry of positive tests into the Register of Notifiable Events. The states and territories would need the changes to proceed with their own draft bills.

Consider: COOPERATION and its COST, DELAY in requiring action by nine parliaments, DUPLICATION with two levels of government dealing with the same issue and the absence of reasons for DIFFERENCES warranting UNIFORMITY.

Prime Minister Keating quoted to caucus a Business Review Weekly article saying that there was no vertical fiscal imbalance. `We gave more to the states when they needed more funds but when there is a surplus we can use the surplus in the best way we see fit. That is the nature of our system of government.

`Costello says that if we give the states more responsibility they would be more abstemious in their spending but that is really wrong; there is no vertical fiscal imbalance here and, world wide, economies are held together when tax powers are held together by the national government. In the next three years there will be $2.8 billion to return the states to `85-`86 figures. Costello is about power, not money; if you give them money it's still financial assistance grants.

Consider that state government power over the economy is limited to those powers the Commonwealth deigns to give them. Therefore UNIFORM legislation on major fiscal decisions would reduce BUCK-PASSING and BLAME, CONFUSION, DELAYS in economic action and the consequent higher costs.

The Electoral Commission would be able to sell its goods and services supplementary or alternative to those supplied to the Commonwealth and States and the Joint Rolls Arrangements.

The bill proposed a joint system for developing food standards in Australia and New Zealand but adoption in Australia would always depend on the states and territories. The standards would be developed by the Australia New Zealand Food Authority and documented in the A.N.Z. Food Standards Code. The National Foods Standards Council adopted the arrangements.

Consider that New Zealand, one state, could immediately enact this agreement with less COST, less CONFUSION about standards, less COORDINATION, less DELAY, less DIFFERENCES, and less DUPLICATION of responsibility. UNIFORM legislation is logical in Australia.

She said effective over-riding of Tasmanian law was squarely within the constitutional power of the Commonwealth and should be given priority.

He pointed out the different definitions of adult in the states. Age 21 may be argued as a legal lower limit in Western Australia. Legislation would need to be reasonable to avoid court challenge.

In conformity with the International Covenant on Civil and Political Rights article that “No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour or reputation”, the bill provided that sexual conduct involving only consenting adults acting in private is not to be subject to any arbitrary interference by any Commonwealth, Territory or State law.

Consider the CHECK ON FEDERAL POWER argument and the difficulty states have in avoiding federal over-riding of such legislation, CONFUSION about DIFFERENCES, state to state, and the lack of arguments against UNIFORMITY and the lack of COOPERATION on international covenants.

Following a High Court decision the Government proposed to eliminate any expectation that Commonwealth, state or territory administrative decisions had to comply with ratified but unimplemented treaties or that an affected person could make submissions on the issue.

Consider: Treaties are logically a national issue. National UNIFORM legislation should apply to the whole nation so that where the Commonwealth legislates there can be no CONFUSION and no question that such exemptions would apply to the whole Commonwealth without the need for further legislation.

State - territory - Commonwealth Ministerial discussions were necessary to make these changes. Business, accounting, educational, professional, scientific films no longer required classification unless visual images warranted MA, R, X or RC classification. The requirement to submit material on computer bulletin boards for classification would only apply if there were a Commonwealth, state or territory provision.

The bill would give a better legislative basis to improve compliance with UN obligations. Sanctions required reliance on a variety of legislation and the bill would mean faster and more flexible reactions to situations like that in Yugoslavia. Minister Bilney deplored state governments entering `the realm of foreign affairs'… `particularly where they involve the stationing overseas of people who spend the taxpayers' money like water'

Consider: UNIFORM control of overseas representation would reverse the DUPLICATION, the CONFUSION, the consequences of poor COORDINATION, the COST of state overseas representation and the fact that the metropolitan based states would be no better at promoting all the nation's tourist and commodity areas than the Commonwealth.

Previous state and territory service by parliamentarians would now only be recognized if there was payment by the scheme for a transfer of that service. Transition arrangements would protect members.

Consider the advantages of UNIFORM legislation involving a Remuneration Tribunal covering all elected representatives and the resulting COSTS savings.

In an aside the Prime Minister said that Victorian Premier Jeff Kennett had asked for half the proceeds of our benefits from privatization. The Grand Prix hasn't solved Victoria's problems, he added.

Consider the state - federal COMPETITION for funds, for example from the huge taxation income from sold enterprises like Commonwealth Bank shares and the purchase of state banks by the Commonwealth Bank.

This would enable the Commonwealth to collect annual charges for maintaining registrations and listings of therapeutic goods, and for maintaining manufacturing licences where effected on behalf of states and territories under the federal arrangements with nine complementary laws to be passed by the commonwealth, state and territory governments.

To establish the uniform national system of control over therapeutic goods, amendments would be inserted to facilitate state and territory legislation.

The proposed legislation would ensure security of title over traditional lands in the Northern Territory and would schedule the areas of Catfish Dreaming, Eva Valley Station following agreement between the Jawoyn Association, the NT government and the mining company Zapopan NL. Kanturrpa-Kanttaji would be scheduled following agreement with NT Power

Successful meetings having taken place with representatives of Aboriginal groups the mining industry and pastoralists. The (state - federal) Ministerial committee on Mabo has met.

The Government is proceeding slowly partly because we need to consult with the states because they have jurisdiction over land title and a new body of law will probably be needed for land title for aborigines.

There are further Consultations taking place with aborigines and a paper will be presented to the Council of Australian Governments meeting in June on that matter. There will be some form of proposal put to the states at that time and the Federal Government will seek their cooperation.

She said that some state governments were not listening to Aborigines. The Prime Minister said there was some consultation happening with the states. `We don't want to lose the closer focus we are conceptualizing. Let's get there first - as soon as possible - the question of titles remains open - then deal with the states.'

The reforms were to enhance the roles, effectiveness and accountability of regional councils, to strengthen provisions relating to the declaration of pecuniary interests, to prescribe election processes, wards where necessary and boundaries and to allow the minister to remove chairpersons or deputies for misbehaviour. Minister Robert Tickner acknowledged the support of the states and territories.

The PRIME MINISTER outlined the reasons for trying to include the States in any compact. Central to this was that responsibility for management of existing land title currently resides with the States through the various land departments. Commonwealth has not been a land manager and if it were to go it alone this would necessitate the establishment of a Commonwealth Lands Department.

Minister FRANK WALKER advised that in 1 year Western Australia issued 16,000 titles - multiplying this figure by 6 states and 18 years, would give some indication of the number of titles issued since 1975. Many would be mining but the figure would also include things such as pipelines, parks, dams, pastoral leases, travel resorts.

Reynolds said that a lot of people `don't trust the states but understand the need for an olive branch.' Was there an appeal mechanism? The PM expressed faith in the tribunal and court system.

On Mabo the PM said: Negotiations have been continuing with the states over the past few weeks. But these discussions will not lead to any diminution of the core principles. The states are the land managers and we need to get an agreement now because it will be harder to change those agreements later… If we fail to pass the legislation then the states would have to legislate.

As a result of these discussions he feels there is the potential for a national settlement. He expressed the hope that the states will pick up the national principles.

Remains to be seen whether such an arrangement will work and whether the states will accept it. If the states do object it may be necessary to override with the racial Discrimination Act…

It may be possible to give rights under specials measures of the Racial Discrimination Act; we may be able to validate titles. In the 1970's the NSW Lands Minister excised 50 acres and we can now validate titles. The Aborigines are saying “validate and give us some right to negotiation”. Would the States accept this? Only after legal advice touching the Racial Discrimination Act. …

The Government will propose a regime that includes both cooperating and non-cooperating states. It is important to remember that the states are the land managers. If the approach fails there can be challenges in the High Court.

PAUL KEATING outlined in the presence of the media the historic Mabo agreement that resulted from the Cabinet decision last night. He thanked and paid tribute to all involved especially his ministerial colleagues on the Cabinet committee, the bureaucracy, the Prime Minister and Cabinet team under Sandy Holloway and those states who could see the benefits to be gained from a co-operative approach.

PAUL KEATING said that an original claim can be pursued either through the state or federal mechanisms but they must stay within the one system once they have committed themselves to it.

Forum shopping: They can go to the federal court, or to the state supreme court but they have to stay in the vertical integration of either one.

The amendment followed an agreement between the NT government, Gambarora Industries Pty Ltd and the Central Land Council representing the Aboriginal claimants in a Wampana claim of unalienated Crown Land. The 1976 Act had already allowed the granting of 57 separate parcels of land to Aboriginal Land Trusts and this change effected the grant of `an estate in fee simple in the land which was the subject of the Land Claim'.

Margaret Reynolds said there was increased racism with claims that there may be a claim on the Great Barrier Reef. All this damaged our credibility and we need a strategy to deal with it.

The PM said Queensland had decent legislation and will be singing the same tune. There is a common thread in the argument on native title. The Aborigines are having a debate then we'll all act. He will move more on these things. (Premier) Court of WA is roaring his line over in Perth with cameras out and doors shut. What a model of cooperation. Dividing people off is fallacious.

PAUL KEATING said that the problems with cross vesting procedures could always go to the states or Federal Court. The question is whether judges in state courts can make valid judgments. If the state is wrong the matter can go to the High Court of Australia.

The awarding of Native Title is at issue. There will always be a final right of appeal to the High Court. If there is poor treatment by the state court this will lead to them being declared a "non cooperating state."

Discussions with aboriginal representatives only got under way last week as after the Eva Valley meeting they had called off negotiations. The states agreed to the structures.

Aborigines would not trust the federal minister to over-rule states because the government could change. You can't give carte blanche… There needs to be ongoing discussion with the committee.

CLYDE HOLDING asked whether Jeff Kennett was speaking on his own behalf or for all states. What was Richard Court's position? PAUL KEATING said that Kennett was speaking for all states except Western Australia. Court was in a difficult position and would be under increasing pressure from the other conservatives.

58 parcels of traditional land had been passed to Aboriginal Land Trusts but an agreement between the Territory Government, the Hodgson Downs Land Claim and the Northern Land Council resulting in a need for the scheduling of new parcel of land.

This responds to an agreement between claimants to the Western Desert (South) Repeat Land Claim and the Central Land Council. The Northern Territory Government requested that the Commonwealth add the parcel of land to the Schedule awarding titles to parcels of land to specified trusts.

The Commonwealth and the Wreck Bay Aboriginal Community negotiated to implement recommendation 315 of the Royal Commission into Aboriginal Deaths in Custody. As a result this would enable title to the Jervis Bay National Park and the Jervis Bay Botanic Gardens to be granted to the Wreck Bay Aboriginal Community Council. The grant would be subject to the Minister's satisfaction and to an agreement to lease the land to the Director of National Parks and Wildlife.

The Commonwealth Grants Commission Act would be extended to report on funding for works and services in Jervis Bay and to enable inquiries into the financial relationships between the Commonwealth and Norfolk Island.

This legislation (see Crime 3.2), resulted from an attempt by Commonwealth, Territories and States to end reliance by the Commonwealth on their varied forensic procedure provisions, provisions uncertain in scope and generally with few safeguards.

The bill laid down forensic procedures associated with Commonwealth offences, balancing the rights and interests of suspects against public interest and provided safeguards to protect people, including Aborigines and Torres Strait Islanders.

Consider the Constitutional power the Commonwealth has over Aboriginal and Torres Strait Islander issues entitling it to override the States. The government preferred to negotiate the issues, especially those relating to land because of the states' role in land management. The Commonwealth took a soft approach using COOPERATION and COORDINATION. UNIFORM nation-wide legislation providing local options of the type detailed above involving the Northern Territory, the Australian Capital Territory (Jervis Bay) and Victoria, would not require State involvement.

Prime Minister: The states are reluctant to adopt Hilmer (the National Competition Policy Review conducted by Professor Fred Hilmer). They were offered a per-capita guarantee worth the equivalent of $1 billion and a population based guarantee. Their officials agreed and Hilmer would give their authorities real growth through recession yet in Darwin they wanted 50% of Commonwealth tax receipts to play ball. In the afternoon Premiers Goss (Queensland) and Fahey (NSW) said we need to chalk up some progress and the ACT and NT supported us. Western Australia gave qualified support. Labor wants competitive changes affecting GBE's (Government Business Enterprises) and the conservatives are fighting them.

Graeme Campbell said the obsession about inflation made Hilmer hard to address. The PM said electricity prices in NSW had dropped 23% and we were likely to see more price drops and more business activity, a greater capacity for new investment, following the changes.

MOTION MOVED: BOB BROWN, SECONDED: PETER KNOTT Caucus expresses its deep concern about the proposal by the NRMA motorist organization in NSW to seek the public listing and float of that body.

MARY EASSON spoke in opposition: 85% of NRMA members voted in favour of the public listing, which would make it easier for the NRMA to expand into Queensland and Victoria. Roadwork would not be neglected. Caucus should leave the matter to members of the NRMA and the courts.

Graeme Campbell referred to suggestions about the need for more competition, saying that the Trade Practices Commission sanctioned newspaper deliveries.

Barry Cunningham said the COAG (Council of Australian Governments) meeting should cover competition policy, a major issue in Victoria. The PM said he was alert to the choice of state owned grids or power owners and to problems involved.

This uniform protection of business and consumer rights followed discussions with the states, territories and the public and after 130 public submissions to the National Competition Policy Review conducted by Professor Fred Hilmer.

Jurisdiction over competition and consumer matters would be given to the Australian Competition and Consumer Commission, ACCC, merging the Trade Practices Commission and the Prices Surveillance Authority.

A mechanism would be provided for state and territory application of competition provisions of the Trade Practices Act to business activity not previously covered. All those governments were expected to legislate relevant powers to the ACCC and the Federal Court.

Access to essential facilities of national significance, including electricity grids and gas pipelines, would be provided to buyers following application and `declaration' of the service by a new National Competition Council. Here we see a new opportunity for users to buy power and fuel from interstate providers, previously monopolised in each state, and there is no requirement for privatisation.

The National Competition Council would have advisory and research functions and would make pricing and access recommendations. Prices surveillance, price inquiries and price monitoring would be the duty of the ACCC and could even be applied to state and territory businesses.

The Australian CompetitionTribunal would take over the duties of the replaced Trade Practices Tribunal and hear appeals from authorisation decisions of the ACCC and, a new responsibility, appeals from decisions in access matters.

The amendments on the bill, introduced at the day meeting of 28^th March 1995, recognize state and territory access regimes; clarify the operation of licenses; recognize Territories' cooperation; and clarifies provisions relating to the exclusion of states' and territories' cabinet material from compulsory information powers, and `non-business' activities excluded from coverage.

The long and involved procedure in responding to Hilmer's National Competition Policy Review caused DELAYED action on a major and, to the government, vital policy change, not because the states were opposed to more competition but because there were so many DIFFERENT approaches from the nine governments. The COST of implementing the policies, and the COST of coordination and discussion between governments would have been overcome by one government implementing a UNIFORM policy at a national level. Carefully considered DECENTRALIZATION of some options to local areas could have encouraged local incentive and therefore initiative in promotion and marketing of their resources - commodity, tourist and human. Metropolitan Australia could benefit from the economic, cooperative, planning and environmental approach of modern city states which reach out to the regions around them, as partners, not leeches.

Coastal, rural and remote areas would be freed from the domination of city-based governments and able to draw on the many stable and growing centers around the nation.

State boundaries seemed to be an unfair inhibition on expansion of a business whereas local options, such as referenda, under national UNIFORM guidelines would be a fairer way of keeping unwanted business away - eg. a supermarket or a sex shop or a knackery.

Aiming to simplify the Corporations Law, these measures would improve the operation of the law and facilitate the operation of the Australian Securities Commission and the Corporations and Securities Panel. The provisions included making the Law compatible with state law.

Consider the COSTLY COOPERATION and COORDINATION necessary to cope with the need for nine sets of laws that should obviously be UNIFORM. The unnecessary CONFUSION for business could be replaced by DECENTRALISATION of options to encourage the development of local initiatives, ideas and marketing.

Definitions would be changed for agriculture industries, to cover transport, conservation measures, and firebreaks and water access, for example; and for mining, to cover transport, power, water, for example.

Consider that even entirely Commonwealth responsibilities like customs and excise have to cope with middle level references. UNIFORM coverage of what are now state issues would reduce COST and the need for COORDINATION.

Responding to critical drought conditions in Queensland and New South Wales this bill provided a safety net to meet cash flow needs of farmers and their families. Further rural adjustment scheme measures, financial counseling, and cash for basic necessities and services would be provided. Jobsearch allowance including partner allowance and family payments would be payable without farm assets being included in the assessments.

The bill would provide reimbursement of state issued certificates for drought exceptional circumstances under the Rural Adjustment Scheme, covering drought relief and Austudy.

SILVIA SMITH asked a question about the drought and Tasmania and the need for a National approach. The drought package includes Tasmania, the PM said.

Consider: The BUCK-PASSING and BLAME that occurs with two levels of government being involved, the DELAYS in assisting people in desperate situations, the CONFUSION about responsibility, especially among applicants, the COST of cooperation and COORDINATION, the DIFFERENCES in assessment standards, the DUPLICATION of responsibility at two levels of government and the REPAIR measures required when intentions are not achieved by government. UNIFORM Commonwealth responsibility with decentralized assessment using Commonwealth guidelines would reduce all those impediments and increase fairness.