All of the above , and much else which is more fully demonstrated in the Brochure, is indicative of growing financial power of the national government over the states with the states generally complying in the end or being bypassed. Is this a sound Government? Many would say that it makes no sense but it is happening because the structures are deficient. They do not match the realities of our time and ambitions.

However, add to this now very obvious tension the persistent failure of decentralisation and regional development in this huge continent, over many decades, aggravated by the economic rationalist public policies and privatisations of the last 15 years or so. The case for abolishing the states is very strong but neither of the major parties, with some notable exceptions of individual politicians, is interested in pursuing that objective. Most of these changes can only be achieved by a National Government that is determined to reverse the process. Reliance solely on market forces to achieve decentralisation and dispersion of citizens has demonstrably not worked. Abolishing the states and creating a different sub-national level of political units this will require substantial Government investment, intervention and regulation. Abolishing the states would provide the financial capacity for a national government to implement such far-reaching changes, by providing a range of incentives and building the appropriate infrastructure.

B. Strengthening Local Government in a new Two-Tier system

The major trouble with Local Government (LG) has been lack of funding. Only recently we saw on TV the plight of the large Blue Mountains Shire unable to fulfil the reasonable demands of its ratepayers due to lack of money. There are many such examples, in rural areas particularly. It is true that in NSW, in May 2005, some fairly major planning reforms were introduced for LG including decentralisation of approval of development and investment decisions. These should effect savings and speed up decision-making. However, overall in Australia Local Government has always been the Cinderella of the three-tier system of Government. It is an appendix of the state governments which themselves are under stress. Why should it continue to be like that? In the early 1970s the Whitlam Government attempted to link LG constitutionally to the Federal Government through a Referendum. This failed as the Coalition argued that it was an infringement of the federal system and principle. Other ways were found to strengthen LG somewhat through changes to the Grants Commission operations. The ambition by LG to have a slice of Income Tax returned to it, as far as I understand it, has remained just that. The rates are pegged and LG is and remains vulnerable to pressures of sectional interests. There is much evidence that the Australian people favour a strengthening LG. LG seminar sessions in the lead up to the Constitutional Convention (some 160?) indicated strongly that the people want LG recognised in the Constitution and also that they favour abolishing the states. They want it strengthened financially and, where desirable and feasible, given greater powers. A further way of strengthening LG is to make the Councillors themselves more independent of pressure groups and LC administrators by raising their status as professional, democratically elected representatives. They should not just be just people who are strongly community minded, or have the time because they are retired or, sometimes, are fronts for sectional interests. Surely, this means that they need to be paid a decent salary. But at least LG , as distinct from possible Regional Government, as some of us advocate, is generally closer to the people and, therefore, more readily fulfils the democratic principle. With 30 or even 100 Regional Governments the first level of Government would still be quite remote, in spite of superior means of communications.

So, the position I put here favours the maintenance of LG in regional and rural areas, with expanded functions for some, powers delegated directly from the national government and, particularly, much stronger financial status and independence. In addition, there should be regions, in part based on the Voluntary Regional Organisations (or Regional Organisation of Councils) grafted on and created by LG , which I have described here as Mezzanine Regions. In addition, Australia needs City Governments, for the larger cities only, with jurisdiction for the whole of the urban areas in question. Such Governments should be elected at the same time as all Local Council elections are held nationally. Such reforms will not only strengthen both the National Government and LG but would end the cumbersome, dysfunctional centralisation, which has been a problem of the states ever since federation.

The Mezzanine Concept defined.

"Mezzanine floor level" basically means "in-between" two normal levels, usually between first and second floors and more often than not, of a two-story building. I think this is a useful analogy with levels of political units because what actually happens on such floors and how they are viewed by the organisation and the public. Mezzanine floors usually house support not very visible to the public/customers/ clients although they are usually quite important, indeed essential to the proper functions of the organisation.

The failure of regional development within the existing structures

In our existing political system structure and existing economic system decentralisation and regional development, from the 1940s onwards, has been mostly unsuccessful. The capacity by the states to deliver on adopted policies to achieve that end was never strong and so, understandably, some regions desired to become states themselves, like New England in the 1960s, for which the Constitution provides in theory. If this option had worked effectively over the last 100 years a quite different situation may have emerged in Australia. However, even the most recent research demonstrates that the de-population of rural Australia is continuing. It is true that a number of regional urban centres have absorbed some of the drift away from smaller rural villages - some are doing well economically, for the moment.

Attempts by Labour and Coalition federal Governments over the last 15 years to boost regional development within the existing political framework, the three-tier system, have nearly all been a complete failure. That much was candidly admitted in the Report by the House of Representatives Standing Committee on Primary Industries and Regional Services (2000) - Time running Out - Shaping Regional Australia's Future. The Report covered many areas but acknowledged the reduction of services in nearly all regional areas and recommended that this had to stop. Competition Policy got the blame for much of the decline in services, rightly so, and the Report recommended "a new focus for investment in regional Australia. Failing that we face the danger of Australia being divided into 'two nations'." (Intro., by L. P. Committee's Chair, Fran Bailey). The 92 recommendations were quite far-reaching however most were quickly rejected by the Federal Government which described them as "too costly or unrealistic" (SMH, 14.3.02).

Earlier the Productivity Commission published a Report following the Inquiry into the Impact of Competition Policy Reforms on Rural and Regional Australia (1999). As part of the Terms of Reference Competition Policy was generally welcomed but should ensure "that the benefits of increased competition flow to all Australians, including those living in rural and regional Australia". Significantly it was admitted that "Competition Policy recognises that there can also be circumstances in which restrictions on competition may be justified where there are offsetting public benefits" . The beginning of the failure of Competition Policy is flagged in this Report - confirmed by the 2000 Report mentioned above. A quote in the "Overview" is sufficiently telling:

"many people in country Australia see National Competition Policy (NCP) as an unprecedented outbreak of "economic rationalism" which ignores important social issues and poses a threat to their way of life - adversely affecting their standard of living and the adequacy of services in country Australia. NCP is widely perceived as being responsible for the withdrawal of government services, the demise of local business, the closure of country bank branches and is regarded by some as a major factor behind the population decline in parts of country Australia. NCP has also been linked to higher rates of crime, drug abuse, suicide and the creation of a demographic 'hole' - a shortage of young motivated people needed to maintain the social fabric to towns through involvement in the community, sporting an recreational activities" (pp. XXIII/XXIV)

The Coalition also came up with the Solutions for Regional Australia Program (from October 2002) aimed to encourage local and regional solutions ideas into action. These schemes are run "by the community, for the community" providing grants from $1000 to $500,000. While some communities may do well out of this it would seem that such programmes are born out of desperation and lack of real commitment to regional development. It smacks of piecemeal tinkering, opportunism and lack of strategic planning. This is not to say that individuals may not have good ideas for regional development, such as for example the "dream" of Richard Pratt to replace open irrigation channels with a (covered) piped system to avoid evaporation. But even Pratt's millions may not be enough to pull this off.

The efforts of the ALP in relation to "regionalism" , when in power, were flagged in 1993 in a Regional Task Force Report "Developing Australia - A Regional Perspective" . The Task Force was headed by ACTU leader Bill Kelty. While the Report created an agenda to address the massive disadvantages of the regions, especially following a recession, recommendations were made for substantial expenditure to rectify unemployment and many other identified problems. Remarkably, for a Labor Government, one of the main terms of reference was to "examine factors affecting private sector investment", seen as one major way to finance regional development. Although the Commonwealth claimed to be in favour of structural change this did not seem to be treated seriously. However, increased public borrowing was recommended, through Infra Structure Bonds. Extensive upgrading of the nation's highways was planned in the Report. While many areas were covered, and some good recommendations made, empowering the regions to assist in this program was to be done by the creation of Regional Economic Development Organisations (REDOs). These should be "genuinely representative of the people in the region". By 1996, only two years after it commenced, the coalition came to power and the program was shelved.

Therefore, strengthening the Local Government level combined with Regional Development are desirable objectives in my view and the two need to be linked. It is the clusters of Local Government Councils, where commonality of regional interests have already been identified for some considerable time, which should form the core of regional activity. Regions in this context are territorial areas grafted on to Local Government clusters, not lines on a map or essentially primarily bio-diverse regions, so designated for environmental commonalities. They are the result of the needs of people and are, in the main, voluntarily created by Local Government clusters, not by a higher authority.

Regions as adjuncts to Local Government - the Mezzanine Concept

Such regions would then become adjuncts to LG , elected by them and, in the first instance, accountable to them. We could say that the regional administrations - and that description would be most appropriate - are indirectly elected by the LG clusters. It is only in this way that LG achieves the semi-independence and autonomy that brings, at least in part, Government to the people. This would end the Cinderella status of LG. While the Kelty Reports recognised the need for a bottom-up approach to Regional Development it did so in the sense of "broad-based community", rather than using the existing Local Council system. There was a lot of talk of "partnership arrangements' which are usually temporary, weakly defined channels. Of course, there are at present Local Councils which do not inspire confidence and this situation would certainly have to be addressed. Such an arrangement is different from Regional Development bodies, such exists on the Central Coast, which are appointed by the State Government.

However, such a regional organisation as suggested here, has to be defined and provided for in a new (Republican) Constitution. Provision has to be made for their proper functioning and operation, and for the authority flow in relation to Local Councils. The Constitution should provide a safety net for vulnerable regions, especially regions which have difficulty in maintaining themselves financially. Thus equalisation grants used by the Grant Commission to maintain comparable living standards amongst the states (as at present), to create equity, could be applied in like manner to regions, and some guidelines laid down for equitable distribution amongst the Local Government clusters. This system has worked well in the past and there is no reason not to extend its contributions.

The principal purpose for Local Councils to form Voluntary Regional Organisations (also referred to as the Regional Organisation of Councils or ROC) has been resource sharing. In a time that Councils experience serious financial stress, especially in rural areas, the need for resource sharing has never been greater. However, as Schultze reported Voluntary Regional Organisations have been in existence for quite some time. "As early as the 1920s Councils formed regional organisations in order to improve the effectiveness of Local Government. In the 1970s the then Commonwealth Department of Urban and Regional (DURD) required the establishment of regional organisations of Local Government for the distribution of Commonwealth Grants"

She argued that the established patters of cooperation, communication and mutual trust between member Councils working together in a regional organisation provide a climate that is receptive to resource sharing. Her study covered some 24 VROs throughout Australia. Resource sharing can be defined as "any arrangement where a local government body cooperates with another body or bodies to share financial, human, physical resources to achieve an objective". There are a great variety of services that fall under this definition. Some VROs have been very successful, other less so but it seems to me that here is the basis for successful partnerships as a natural adjunct to LG.

The VROs (or ROCs) operate as a kind of Mezzanine level of government, in my view, and can be formalised, without being inflexibly standardised, in a new Constitution.

Large City Government

It has always baffled me how large Australian cities can be effectively governed by a plethora of small and large Municipal Councils. Of course, this has grown historically but as the metropolis grew the problems of the sprawling, uncoordinated urban areas and the many common problems called for regional solutions, really often city-wide solutions, were hard to come by. Perhaps the Metropolitan area of Sydney has suffered most from such fragmentation, lack of overall planning and problem solving. Whilst some would claim that there really is system in this madness pressures for amalgamation have grown - and often staunchly resisted - as the record of a NSW Report (2002) (by Professor Bryce? ) has shown. Still, the continuing trend towards amalgamating City-based LG areas and reducing their number is unmistakable. Yet, other large cities in the world have managed successfully to launch City Governments. In Australia the ACT may well be regarded as a City Government. Greater Brisbane has had its critics and they would say that this is not a good model to be followed by others. If so, other models can be found. One could hardly deny that this must be desirable from the point of view of efficiency as the large city has a great number of inter-connected issues typical of any large-scale system, that cannot effectively be tackled by dozens of relatively small and financially weak units. How it can or should be achieved is a different matter - and will not be addressed here in this paper. One thing should be obvious. Most Large City citizens do not identify with the Local Government of their residential area. They generally identify with the larger City of which they are residents. This is quite different in country cities and country towns and even in regions on the periphery of the metropolitan area where Local Government does have community identity.

It is quite apparent that the State Governments actually perform in many respects the functions of City Governments, that is Capital City Governments. The business of the bush and/or the peripheral region like the Central Coast, is sometimes regarded as a somewhat cumbersome add-on, part of the explanation of the neglect of rural and regional Australia. Sure in NSW there is a Minister for the Central Coast and that suggests at least recognition of this problem. But overall in Australia there is an inbuilt tendency for the State Governments to have a bias towards city issues. In a new constitutional construct it would be highly desirable to separate the two and link all LG directly to the National Government.

C. Mooted changes to the electoral system. Why is this important for constitutional change?

When it comes to actually putting a proposition like abolishing the states to the voting public the problem of changing the Australian Constitution is certainly daunting as Section 128, which governs the amendment process, has proved to be an enormous obstacle quite contrary to the intention of the federal constitution makers. A national majority is required, and a majority in a majority of states. Only 8 of 44 such proposals went through since 1901. No doubt many more were considered but not put because they didn't have bi-partisan support, the prerequisite for success. Another major problem is that all initiatives for constitutional referendums have to come from the politicians.

These problems are made more severe as a result of compulsory voting. Australia is one of the very few states in the world that have compulsory voting. The debate about the advantages and disadvantages of voluntary voting is old but a number of facts can be put here right now. The major claim against voluntary voting it is that it facilitates extreme groups coming to power. That can be checked against actual practice and it has proved to be incorrect. Secondly, and this is the most important point for us, significant constitutional change in Australia is likely to remain very difficult without it. The record shows that. What would happen if we had voluntary voting? The voter turnout may, initially in any case, drop to perhaps 40% - 50%. It that a drama? No, to the contrary! Many voters are generally not well informed on politics , especially not on constitutional issues, and when in doubt they tend to vote NO in referendums. Voluntary voting will tend to bring the interested voters out, those who have taken the trouble to try to understand the issues and, on the whole, are better informed. The politically aware will vote. Voluntary voting will for these reasons provide a fair opportunity to gain seats to minor parties. That is good news because the existing system has long benefited grossly the major parties and look what an undesirable political situation we now have! We should not forego the opportunity to avoid the voting tendencies of those who don't know, are not interested or, for whatever other reason, prefer not to vote!

To effect constitutional change of the magnitude of abolishing the states - and this is a pretty significant change - it would also be highly desirable to change the electoral system to proportional representation. Most modern states have that democratic voting system, co-invented in Australia, and resulting in a more democratic, diverse parliament. The advantages of PR over the current single-member-district system are very many but the net effect of it would be that we the dominance of the two-party system would end. That is of vital importance for constitutional change. In the last 105 years constitutional referendums have only been successful if both major parties support the proposal. That debilitating requirement would end if we had multi-party representation in the federal parliament. Regrettably, our two look-alike parties are not interested in PR because (they believe) the existing electoral system benefits them both greatly. However, consider what could happen if one was to adopt that policy realising that many voters actually do want change, contrary to Mr. Howard's latest claim that they are satisfied with the electoral system. Any major party desperately looking for a policy that distinguishes it from the other should take note!

So, assuming that a large majority of the population actually do want changes to the electoral system and the Commonwealth Electoral Act, and also favour abolishing the states, at least one the major parties will need to move that reformist proposal to the top of their policy agenda. With the Howard Government in power now we can only hope that they actually proceed with voluntary voting and that the ALP supports that as well to achieve the flexibility needed for other, including constitutional changes. It seems to me that if the ALP is actually looking for new reformist policy initiatives of substance they should give the voluntary voting proposal oxygen and dump their old opposition to that, based on criteria which are at least 50 years old and are no longer valid.

Conclusion

Basically there are three short conclusions to this paper:

1. There is growing recognition of the dysfunctional nature of the Australian federation. In particular there is an awakening by conservative parties and politicians that various unhealthy tensions exist as a result of the present constitutional arrangements. However, they have no real answer for these problems other than fruitless discussions at COAG level and uncomfortable collusion between the major parties to maintain the status quo. One would think that the ALP would finally grasp the nettle and explore what is required in terms of constitutional change policy. This policy area is crying out for a radical approach. What party is going to run with it?

2. Ending federation means creating two levels of Government: National and, in my view, stronger Local Government, plus provision for Mezzanine type regions, accountable to Local Government. It means not just saving more than $30 billion every year. It also means much better Government, effective decentralisation, renewing democracy, saving the environment effectively at the local level by the citizens

3. Thirdly, as a first step changes should be made to the electoral system which go much further than what is contemplated by the Howard Government. The introduction of Voluntary Voting would greatly facilitate the potential to encourage voters to vote for parties that favour SYSTEM CHANGE. That means, in essence, that voters would start looking more closely at the policies of smaller parties, including those not now represented in Parliaments which have policies for systems change in their platform. As a second step Proportional Representation should be introduced. My prediction is that the major party that has the guts to adopt both these initiatives will soon be backed solidly by the Australian voters.

Extracts from newspaper articles:

Tim Colebatch, Farrah Tomazin - "Australia doesn't need states": Howard",

The Age, 25^th March, 2005