Senator Russell Trood of Queensland made a speech on Regionalism in which he argues that the health of the federal system requires devolution to the local authorities closest, and most competent, to deliver the required governance to citizens.

Trood also suggests that devolution might require the establishment of more states in order to increase the local responsiveness. He also argues that clean boundaries of authority, responsibility and separation need to be defined but with an acknowledgement that the modern-state invariably is not composed of autonomous fiefdoms but overlapping and co-operating political areas. Trood also mentions that devolution is not just a rural concern but will bring greater benefits to city-dwellers too.

I agree with Trood. The on-going centralisation has become a structural weakness in our political system. The antidote is decentralisation, and as Trood argues devolution.

The entire speech is reproduced here;

A hundred years after Federation, Australia has an increasingly centralised system of government. The recent High Court decision in the Work Choices case was further confirmation of this reality, but the movement towards the centre has been evident for a very long period of time. The extent of this movement would have surprised some of the founding fathers.

They created a federal system to devolve power and to anchor democracy in a country which, even by the start of the 20th century, exhibited growing political, economic and social diversity.

Given the strong drift towards centralism, it is perhaps not surprising that it has attracted frequent and increasingly vociferous criticism. Nor is it surprising that a long list of other ills are supposed to afflict the federal compact, including the vertical fiscal imbalance between the states and the Commonwealth.

Without embracing the complaints of every critic, I share the belief of many that there is now a need for us to look seriously at the dysfunctional aspects of federalism and to think creatively about the way that we might address them. I am convinced that, when we do so, we will not reach an adequate resolution of the problems unless there is a strong dose of devolution or greater regionalism within the policy mix.

Tonight I wish to argue briefly a case for a new regionalism.

When the six existing colonies formed one indissoluble federal Commonwealth of states in 1901, there was every expectation that new states would be admitted to the federation. Indeed, were the founding fathers to return today, they would be astonished to find that after 100 years this has not occurred. The last time there was any significant change to the political geography of the country was in 1911, when the Northern Territory was hived off from South Australia. Certainly, it was not expected that my own state of Queensland would remain unchanged. When it became a colony in 1859, it had a population of just 23,000 people.

By the time of Federation the numbers had grown substantially and there was considerable anticipation that a new state would be created in North Queensland. It was this prospect that encouraged many in the north of the state to vote so strongly in support of the Federation referendum.

The expectations of the founding fathers have not been fulfilled, and the reality is that there is a low correlation between Australia's real-life urban and rural regions and the levels of government designed to serve them. Put another way, the geopolitical boundaries that divide the nation-- whether we talk about local government boundaries, state borders, the lines that mark out area consultative committees or even the myriad divisions created for the delivery of health, education and other government services--are often poorly aligned to the communities of interest they are designed to serve.

There is no necessary virtue in comprehensive regionalism and no ideal level of devolution for good governance. However, there is the well-established principle of subsidiarity. This principle holds that decisions should be taken, and responsibilities exercised, as close as possible to the citizens at the lowest level of competent authority. We have long given rhetorical support to this proposition but equally long disregarded it in practice.

In these circumstances it is perhaps not surprising that Australia's existing political geography is coming under increasing criticism from a wide range of perspectives. Local government representatives routinely contend that they are closest to the people but deprived of the power and the resources and increasingly subject to the burden of cost-shifting from other levels of government.

The states and territories complain constantly about fiscal centralisation, overlapping and duplicated functional responsibilities and, increasingly, federal policy control.

Nor is the Commonwealth satisfied with current arrangements. The states rightly earn blame for delaying and frustrating sensible Commonwealth reforms, for delinquency in failing to cut taxes under GST reforms, for a failure to spend on infrastructure development and for their tolerance of numerous regulatory inconsistencies that add massively to the costs of business, both local and international.

Finally in this litany of federal woes, it is useful to point out that the complaints and frustrations with current arrangements of federalism are not just confined to the three levels of government. In October 2006, the Business Council of Australia released a report which contended that overlap, duplication and cost-shifting between the Commonwealth and the states, unnecessary taxes and overspending on programs because of a lack of oversight and accountability cost Australians at least $9 billion a year, and perhaps as much as $20 billion a year, through higher taxes and poorer quality services.

It is not a natural instinct among politicians, especially at the federal level, to consider that part of the solution to the problem of federalism is to seek greater devolution. More often, greater centralisation is seen as a better response. For some, to contemplate the idea of more states, and perhaps expanded regionalism, as a solution to federalism is as near to a nightmare scenario as is possible. This view fails to take account of the potentially productive power of the regions that could be released if serious reforms were achieved.

It fails to acknowledge how political restructuring can help promote innovation and ensure economic sustainability in a globalised economy.

It fails to appreciate that increasingly in Australia governance is a shared activity between local, state and federal authorities and that reform and the achievement of prosperity involve not so much competition as cooperation and collaboration between these different levels of government.

The idea that each of Australia's levels of government are separate fiefdoms--autonomous in their decision making, separate in the management of their financial affairs, independent in the exercise of their responsibilities and in every other way removed from one another--is an old and thoroughly outdated view of the modern developed state.

Of course, there need to be clear divisions of political authority and also comprehensive understandings of roles and responsibilities, but these must exist within a much more sophisticated model of contemporary intergovernmental relations.

The model of enhanced regionalism that will work best for Australia is a matter for debate. We could pursue more states created from existing ones, stronger regions with more widely devolved powers created within states or, of course, the even more radical idea of abolishing the states altogether and moving to a two-tier system of governance with many regions. All are possibilities.

We can debate these options in due course. For the moment, we have a far greater challenge--that is, to imagine a new federal future around a stronger, more sustainable regionalism. Perhaps we should be concerned that the Australian people have no interest in such things. On this matter, I draw the Senate's attention to the Constitutional Values Survey in Queensland and New South Wales undertaken by researchers at Griffith University. They showed a remarkably high knowledge of the problems of federalism among the public and a willingness to embrace reform.

What, then, might be the possible benefits of a reformed system?

First, there could be a more effective political system with better economic representation and accountability. Second, it would offer more efficient and responsive public administration. Finally, it would be possible to see communities with higher levels of social, economic and environmental sustainability. In Australia, arguments for greater devolution within federalism are often seen as arguments designed to benefit Australians in rural areas.

This is a narrow prism through which to consider the arguments for change. Certainly, regional Australia could hope to be empowered through reform, but the shortcomings of federalism affect those in urban areas and certainly those in the rapidly growing sea change communities around our coast.

Regionalism is a program of reform for the whole country. I would be surprised if reform was to take place quickly, but the reality is that to date our efforts at federalism reform have been half hearted and our interest in regionalism pursued without a serious commitment to the value of devolution.

In a globalised world, where the challenges of maintaining economic prosperity, the integrity of our liberal democracy and a high measure of social cohesion are constantly before us, we can do so much better.

In the "Great Mistakes of Australian History" Clive Moore tackles the problem of federation and its choice in 1901. Moore argues that the constitutional process in the 19thC failed to engage with the Pacific and Asia, as well as made the constitution impervious to change. His final point is that political expediency and compromise between the colonies to get them to agree to federation has meant that the colonial boundaries are for ever cast in stone as states.

The first point was probably not socially possible. The 19thC had 'scientifically' convinced itself of the superiority of the white and Briton race. The fortress mentality that led to the White Australia policy was agreed upon by all sides of Australian politics.

It is an immoral chapter in Australian governmental and administrative history but was popular enough that it could not have been stopped. It was not a result of the constitution, as another article in the book notes, Darwin was setup to be a multi-ethnic Hong Kongese style trading centre, but hardening racial opinion never enabled it to achieve that in the late 19thC and early 20thC.

The other persistent myth, which Felix challenged, and has now been empirically determined to be false, is that the Australian Constitution is hard to change. The referendum is structured in a way to satisfy both the national and federal character. For instance:

• Majority in Senate - federal character
• Majority in House - national character
• Majority of popular vote - national character
• Majority of states (ie majority of popular vote in a majority of states) - federal character

This is a federation design choice. The majority of states may seem like an extra step too many, and I think it is, however, despite Australia's small number of states, it has not affected an outcome of a referendum. If a referendum has passed the popular vote, in all cases that I can recall it has all passed the state majority as well.

The high failure rate of Australian referendums has been because of the large number of referndums put forward that were for the increase of Commonwealth power. When the referendums are divided in this manner it becomes obvious that Australian voters were rejecting centralisation.

Moore notes that Canberra has found different ways to get around this:

This has been partially overcome by the occasional (though rare) successful referenda, and the use of the High Court to extend the federal government powers in a way never contemplated by the authors of the Constitution.

The latter is a significant issue. As can be seen by the following chart, the referendums for centralisation dropped off in volume in the second half of the twentieth century as the High Court's decisions and support for centralisation in Canberra has made referendums less necessary for Canberra to achieve the power it wants.

Moore's third complaint, that the states are forever fixed in geopolitical shape by the constitution is a good one. The value of a constitution is that it provides inter-generational stability and certainty of government. It removes the disruption of coups, violence for political power, or warfare between competing political domestic powers. The downside is that it is inherently inflexible by design.

This raises questions of balancing stability and fluidity. Normally when we talk of these areas we consider the stable technology to be constitutionalism while fluidity is provided by statutory legislation.

It is hard to give a national government statutory control over the States as complete centralisation would be a quick process rather than one that has been eroded over a century. The State control over Local Government carries similar pitfalls.

Yet if we look at Local Government it has remained fairly volatile as to its borders as administrative growth demands. For instance the Brisbane City Council and Penrith City Council were both created by the coalesence of several smaller municipal councils. I don't think anyone would doubt that the growing administrative challenges of those two cities made those amalgamations wide.

They are examples of a centralisation process. Not unlike the Federal Government's encroachment into the States. One of the purposes of Federation is to have powerful decentralised political entities that can rival the national government for power. This keeps overt centralisation, and the propensity for central tyranny and inefficiency in check.

Moore writes:

I am not advocating abolishing the states, having one national government and preserving all of the several hundred (629) local government units.

However, there are clearly regions within Australia that would work well as provincial government units. To name just a few: Wimmera, the Pilbara, Western NSW, New England (a referendum on the New England statehood was narrowly defeated in 1967), Queensland's South-East corner, the Darling Downs, the Cental Queensland coal-basin and Cape York would all function much better under their own regional governments.

In this area Moore is arguing for what Russell Trood called 'regionalism' in his Senate speech. This is a devolution of the states as administrative areas while maintaining their constitutional status in the federal constitution as states.

This minor form of devolution would still leave fairly powerful state bodies. Moore notes that the Brisbane City Council [BCC] has a similar budget to Tasmania and it is implied in Moore's article that he sees the provinces in being something of the BCC's size. He concludes with:

The ideal new government system would have a national government and around 30 provinces, designed for efficient regional operation, with a constitution capable of beind amended as circumstances change.

Moore's idea is not new either. The Prime Minister, John Howard, has remarked on radio:

"If we were starting Australia all over again, I wouldn't support having the existing state structure," he said. "I would actually support having a national government, and perhaps a series of regional governments having the power of, say, the Brisbane City Council.

"But we're not starting Australia all over again, and the idea of abolishing state governments is unrealistic."

Again the BCC is popping up, but it is the exception in Australia and it coincides with the seat of Queensland power - state parliament is in Brisbane as well. The main problems between the national and state governments are fiscal. Namely the vertical fiscal imbalance. This has been used to leverage all manner of control over the states, from the tied grants to the GST, the state's have had their independent fiscal footing removed from them.

John Gorton's and Gough Whitlam's view of federation was that the federal government made policy, funded that policy and the states existed as regional administrative units for the disbursement of federal funds in support of federal policy. This removes all capability of regional or provincial policy making from the states.

So the problem goes far deeper than the geographic boundaries of the states. Whenever these issues are discussed the problem becomes centralisation and Canberra's rapacious desire to be unitary rather than federal.

Incession and secession are already possible in the Australian constitution. The Northern Territory has had a referendum on statehood, while Western Australia has already seceded once and as Moore noted New England in NSW nearly has too. These vehicles exist but have either not been acted upon or not been successful.

The BCC sized provinces are largely national dreaming for a more controllable systems of states from Canberra's point of view. One of the problems with the increasing centralisation is that even the very powerful states, such as NSW and Western Australia, are unable to stop the encroachment of federal government.

In such an environment it makes sense for the subsidiary units to be bigger in order to stand against the larger entity. If the present large states such as NSW and Western Australia were to break up into smaller provinces, the federal government would dominate them politically in short order. We would have a unitary system of government very quickly.

It may be that in our present environment of increasing national power that a couple of the states need to join in order to become stronger against the central entity - maybe NSW and Victoria need to amalgamate in order to stave off federal encroachment. Maybe Tasmania and Victoria need to create a super-state?

I can see where there needs to be incession and devolution of the present state system for administrative purposes, but in the current environment of rampant centralisation, I fail to see how it makes sense. The mechanisms to incede and secede already exist but have only been acted upon in rare cases. As it is they need to be done under the legitimacy of the popular will anyway.

I don't consider the choice of federalism as the guiding a technology an error, nor do I consider the current geo-political boundaries of the states a historical error though I do recognise the fluidity from incession and secession as important for the political and administrative challenges facing regions.

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