This time Jon Stanthorpe is the one copping it . The party room's discipline extends to the State and Territory governments - even if they are labor. Huzzah for anti-federalism .

Stanthorpe's crime was to leak the draft anti-terrorism legislation, which would be more appropriately named the federal naked power-grab bill. This is the draft document [pdf warning] that was presented to the public (not leaked).

From the article;

Australian Capital Territory Chief Minister Jon Stanhope says retaliatory action has been taken by the Federal Government over his decision last week to post the draft counter-terrorism bill on his website.

Mr Stanhope says he has received an email from Prime Minister John Howard advising of the ACT's exclusion from consultation over the next draft of the bill.

My answer is; so punish the feds, deny the ACT enacting or agreeing to any part of it. Australia is a federation after all, not a unitary centrist system.

It should also be remembered that Australia has not had a terrorist attack, and that our multi-ethnic fault line is Bali, not on continental Australia. Terrorism is a foreign policy issue for Australia, not a domestic issue.

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The Australian Capital Territory Treasurer Ted Quinlan and federal Territories Minister Jim Lloyd have rejected a plan to make the ACT an income tax and payroll tax haven . One of the problems facing the States is that Federal government's taxing of income and GST enforce homogeneity on the states. They have little chance to differentiate themselves or to innovate in areas of tax and economic policy. The Federal Government's unitarianism is an impediment.

This proposal has been put forward by the Canberra Institute. This is a think-tank with no internet presence what-so-ever. How can they be so stupid? I am getting annoyed that every article or rafferty's I write now has an opening paragraph which berates the ignorance of politicians, media, think-tanks and other industrial structures when it comes to the internet.

Anyway, I am stuck with trying to make sense, or an opinion, with what the Canberra Times has written on it. Stephen Bartos has put his backing to it. Bartos is a Director at the National Institute of Governance . But without more detail it appears that the plan consists of;

The plan would "declare the ACT and Jervis Bay tax-free advantage areas for both ACT residential PAYE [Pay As You Earn] and company taxpayers. ... The GST, and the Medicare and superannuation guarantee levies would remain from the Commonwealth and the ACT would continue to collect stamp duty, car registration and rates.

That is very innovative, and would probably draw people to Canberra. If the ACT had control over the income tax, they could lay a flat tax of say 5% and use that to fund health and education - they could let the federal government keep any GST revenues in return. But the federal government collecting all income and sales taxes for the states leaves them little room. Jim Lloyd's spokesperson was quoted as saying;

Minister Lloyd notes the idea proposed by the Canberra Institute as interesting but impractical in the context of the national taxation scheme," she said. "The Australian Government administers tax in the interests of all Australians, and the proposed changes would advantage one part of the Australian population over others.

Unitarianism. Canberra sees us as one homogeneous lump. This leaves no room for States to compete for skills, for workers, for families, for businesses or investment through state-based taxation, economic or labour policy. The federal government is inhibiting innovation. Supposedly the Liberals are about competition and free-market policies. They are against it when it dilutes their power at the federal level.

This is the failure of the Australian political system, it enforces federal conformity, entropy, weight and inertia. It is an inhibition to the states innovating and competing against each other.

The United States is a far more diverse federal system with greater state independence than Australia. On Sunday's you see New Yorkers streaming across the Hudson River to the malls in New Jersey. This behaviour is a result of sales tax being lower in New Jersey. New York competes in return by having "no sales tax" days.

Because the GST is leveraged by, and collected by Canberra before being disbursed to the States. The competition New Jersey and New York have over sales tax cannot occur in Australia.

Another example of American states competing against each other is Delaware's incorporation laws ;

More than half a million business entities have their legal home in Delaware including more than 50% of all U.S. publicly-traded companies and 60% of the Fortune 500. Businesses choose Delaware because we provide a complete package of incorporation services including modern and flexible corporate laws, our highly-respected Court of Chancery, a business-friendly State Government, and the customer service oriented Staff of the Delaware Division of Corporations.

This small state has captured a good chunk of the American incorporation market.

One of the few Australian States who has maintained a somewhat independent stance is good ol' Queensland. it still pursues development state policies which are more reminiscent of the autocratic Asian nations. One of the independent policies is the Queensland Fuel Subsidy Scheme . This knocks approximately 8.5c off the cost of each litre of petrol.

I am sure this act of local and regional policy making will meet a green federal challenge in the future where a federal government will use the power of Canberra to force homogeneity on Queensland and bring them into line with every other state. As it is the Federal government is forcing the states into a corner anyway with its own fuel taxes ;

One question remains to be answered. Why has the Commonwealth been allowed to escape criticism regarding underprovision of infrastructure and services, and the problem of traffic congestion?

While state and local governments have nominal responsibility for provision of most infrastructure and services, the Commonwealth controls the main sources of tax revenue. Hence, state and local governments depend on grants that are inadequate to meet their responsibilities.

The Commonwealth refuses to give back more than 16 per cent of fuel tax revenue for road infrastructure, and will not cut the fuel tax rate to make room for congestion pricing by state or local governments. So while special interest groups try to bludgeon the Queensland government into reallocating fuel subsidy monies in accordance with their particular interests, the Commonwealth laughs all the way to the bank.

Big government in Australia has a name - it is the Federal Parliament. It is enforcing control on the states through its taxation policies. This leaves the states homogeneous and incapable of reacting to regional economic pressures. The federal government is acting like a monopoly, extracting rents from the states and inhibiting innovation.

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Probably the most serious crisis a parliament can have is when supply is blocked and the budget unable to go through. The removal of Whitlam by Kerr was predicated over the Labor Party's inability to get supply through the Senate. Currently the Liberal Party in the Australian Capital Territory is threatening to vote against the budget . However it is largely symbolic as even with the ACT Greens support, they do not have the numbers to block supply.

The biggest of the post-dismissal parties, the Australian Democrats, pledged prior to the 1980 elections that if they held the balance of power in the Senate would not stop supply, from Keeping the Bastards Honest ;

... would not use their [Democrats] voting numbers in such a way as to cause the blocking of supply or money Bills in a manner which would prevent the majority party in the House of Representatives from governing.

In the budget bill negotiations of 1981 the Australian Democrats changed their position and threatened to block the parts of the Sales Tax Amendment bill that would affect the prices on bare necessities.

This led to the tension between a minority party holding the balance of power seeking good governance outcomes without trading away their only bargaining chip - blocking repugnant legislation.

At the federal level the debates over blocking supply have occurred in the Senate. The ACT's Legislative Assembly is unicameral and has no upper house. The Executive power is represented by the Chief Minister and a cabinet of five other ministers from the party in majority.

Like all Westminster systems those in the Executive Cabinet are also a part of the legislative and able to vote on bills passing through the assembly.

Currently the Labor party has nine seats in the Assembly, while the Liberal Party has seven. There is one member of the ACT Green party, Dr Deb Foskey.

Foskey appears to be against the ACT budget as well, though there is no indication of her voting, it appears from this press release that she will not vote for it.

The ACT Government's budget appears to have been drawn up according to the recommendations of the secret Functional Review. But it has failed to properly consider the impact of those changes ...

Consequently, this budget is not a strategic document. It is an exercise in cost cutting that will have unknown impact on the quality of life in Canberra well into the future. ...

The ACT Greens cannot support it.

It appears the bill includes some cost cutting and increases of rates . I think this may be the bill; Appropriation Bill 2006-2007 . I cannot tell from that document what is changing.

In the round-up of things, the Liberal party cannot block supply, so the headline on the ABC Politics News is sensationalist. This is political positioning by the Liberal Party, not the constitutional crisis that the editor's headline is leading its readers to believe.

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Australia's independence from British political institutions came through statutory means rather than constitutional ones. The two most important being the Statute of Westminster in 1931 (though not enacted by Australia until a decade later) which disentangled Australia from the British Legislative and the Australia Act of 1986 which gave judicial independence. The Northern Territory and Australian Capital Territory are in a similar position of self-governance under the Federal Government's eye. It is interesting to see Bob Brown lodge a private member's bill to give the ACT more statutory freedom.

Britain was pretty smart and didn't really mess with Australian self-governance. So much so that Statute of Westminster was enacted in Australia in 1942 over the issue of a murder in the Australian Navy. Until that point the Australian Government had not seen the necessity in the Act.

The Australian Territories have seen a couple of instances in the last decade where their legislatures have been over-ridden. The Northern Territory with euthanasia and the Australian Capital Territory with a civil union bill.

Bob Brown's speech contains;

I have been in the Senate long enough to have seen both the Northern Territory legislation on euthanasia overridden in 1996--but that was by the passage of a bill through the parliament--and then the consequential override of the ACT legislature's civil union legislation, a very different matter indeed. In the latter case the executive--that is, essentially, the Prime Minister's office--effectively regulated under the terms of the Australian Capital Territory (Self-Government) Act 1988 to override a bill that had passed through the legislature of the Australian Capital Territory into law in the territory. It needs to be stated clearly for the record that the Stanhope government went to the last ACT election with a platform of bringing in the civil union law. The government was duly elected to office by nearly a quarter of a million voters of the Australian Capital Territory.

The Stanhope government was elected on a commitment to introduce legislation. It then introduced that legislation, which passed through the assembly and duly into law. The executive of the federal government, the Howard government, decided--without reference to the national parliament--that it would in turn regulate to override that legislation enacted by the Legislative Assembly of the Australian Capital Territory.

The Act that Brown refers to contains a section on disallowance of enactments. Section 35 gives the Governor-General (presumably the Governor-General in Council, the interpretation section does not define the GG) the power to over-ride laws the Executive defines as repugnant to the Commonwealth;

(2) Subject to this section, the Governor‑General may by written instrument disallow an enactment within 6 months after it is made. ...

(4) The Governor‑General may, within 6 months after an enactment is made, recommend to the Assembly any amendments of the enactment, or of any other enactment, that the Governor‑General considers to be desirable as a result of considering the enactment. ...

(6) Upon publication in the Commonwealth Gazette of notice of the disallowance of an enactment, the disallowance has, subject to subsection (7), the same effect as a repeal of the enactment.

If this is the Governor-General in Council - who, constitutionally, must act on the advice of the Executive Cabinet - then has the power to repeal ACT laws. Since this Act is from 1988, it was probably the Hawke Government which gave the Executive those powers. Proof that the march of centralisation is apolitical and coveted by all major parties.

Bob Brown's private member bill would repeal most of Section 35, leaving;

Disallowance of enactments

(1) In this section: "enactment" includes a part of an enactment.

(4) The Governor‑General may, within 6 months after an enactment is made, recommend to the Assembly any amendments of the enactment, or of any other enactment, that the Governor‑General considers to be desirable as a result of considering the enactment.

(8) For the purposes of this section, an enactment shall be taken to be made when it is notified in the Territory Gazette under this Part.

This means the Governor-General cannot repeal ACT legislation but rather, can only recommend enactments. This enables the ACT statutory authority to make legislation that is repugnant to the Federal Government.

During Bob Brown's speech there was an interjection by Senator Julian McGauran who simply said;

It's unconstitutional.

The section of the Constitution which deals with New States and Territories is Chapter VI ;

122. The Parliament may make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth, or of any territory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth, and may allow the representation of such territory in either House of the Parliament to the extent and on the terms which it thinks fit.

So is it unconstitutional? The constitution allows for the Federal Parliament to make laws for a territory which means that the Federal Parliament can make legislation which over-rides or repeals legislation from a Territorial Assembly.

So what is the Parliament according to the Constitution? Chapter 1 ;

The legislative power of the Commonwealth shall be vested in a Federal Parliament, which shall consist of the Queen, a Senate, and a House of Representatives, and which is herein-after called "The Parliament," or "The Parliament of the Commonwealth."

But the Governor-General represents the Queen under uber-crappy separation of powers, so the Governor-General maybe implied as being part of 'Parliament'. I think Bob Brown has a claim to the constitutionality of his private member bill making the Governor-General only recommend amendments and requiring parliament (House and Senate) to over-ride a territory bill as was done with the Northern Territory euthanasia bill.

But I am not certain. Our unclean separation of powers make an explicit reading of the Australian Constitution difficult there to my eyes. In the US system with its cleaner separation of powers there would be no doubt as the Congress (legislative) is distinct from the President's Administration (executive) and Section 35 in the ACT Self-government Act of 1988 would be unconstitutional under Sect 122.

Ultimately though, the Australian Federal Government should take a few hints from how Britain dealt with the Australian colonies and later Federal Government and not meddle. It can become an irritant cause.

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