Deep inside I hope you feel it too… The Coming Trainwreck of LNP Fed-State relations #auspol #budget

It’s been said before and it will be said again: too much emphasis is placed on being the ‘first’ with commentary rather than being the most insightful.

This problem was demonstrated once again with the release of Queensland’s budget.  People flocked to the various news outlets to gush about what it would mean and how it would affect everything we know and love.  Bizarre claims were made about what a ‘neutral’ budget would look like, and claims and counterclaims were taken drastically out of context to present Campbell Newman has an inept, penny-pinching, heartless thug who hates art, social services, and — no doubt — everything you love (including puppies).

The problem for Queensland was simple.  It had no way of restructuring its financial circumstances without completely gutting the existing system.  Queensland should be a lesson for us all: if we don’t make sure the fundamentals of State expenditure are solid and robust, we just delay future pain.

The biggest crybabies of the lot were, strangely enough, those who complain the loudest about how the Commonwealth Government won’t spend political capital on reform.  Queensland is in a process of reformation.  Newman decided to take the pain now and then spend two years restoring voter confidence.  I’m not sure how he will achieve that, but I’ll give him the benefit of the doubt.

The more important problem was missed by (at least as far as I could see) all of the hasty commentators.  Is Campbell Newman playing ball with the rest of the LNP mission?

The Federal LNP strategy has been to devolve responsibility (and, therefore, expenditure) of several services to the States.  It is a truth universally acknowledged that State and Commonwealth relations have failed, with the States persisting to the the burst appendix of Australian governance.  To take even a simple example, the Commonwealth is able to make taxation more efficient.  The States are not, thus continue to make up the gaps in their budgets with inefficient taxation schemes.  We cannot broaden the tax base nor optimise the taxation regimes while the States exist.

The Federal LNP has taken a different path: let’s go back to the pre-Whitlam model of federation where, for example, the Menzies government (it pains me to say) carried very little of the overall governance burden.  The Commonwealth took care of those things and only those things which were specifically its role under the Constitution.  The States should deal with the day-to-day things like hospitals, education, and the Internet.

Here’s where it gets fascinating.

The Queensland government has relied on the Federal government covering enough of the essential services that they won’t completely fall apart.  If the Federal LNP strategy is to withdraw from funding essential services, we result in a situation where <i>nobody</i> is going to take responsibility for the essential services in Queensland.  If Queensland guts its services now and LNP take control next year, will Queensland be in a position to revive its services infrastructure?

More than that, this is a complete reversal of Abbott’s position on State-Commonwealth relations.  In his vain little book Battlelines, Abbott suggests a new section 51A of the Australian Constitution:

The Parliament shall, subject to the Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to any other matters in addition to those listed in section 51 [the section which sets out on what matters the Commonwealth can pass laws], provided that a propsed law within the meaning of this section must be passed by both Houses on two occasions — not less than six months apart. [Source: Abbott, T. Battlelines (Updated Edition) Melbourne University Press 2009]

Abbott often claims that we don’t know who the real Julia Gillard is.  I am increasingly uncertain of who the real Tony Abbott is.  Is he a centrist or a devolutionist?  Will we see more ‘State’s Rights’ rhetoric, or will he stand by his book and claim that governing authority should be centralised?

Further, Abbott’s entire budgetary plan revolves around him working directly against what he saw as a necessary reform to the federal model.  It is shocking that the media and commentariat allow him to get away with this kind two-faced nature.

Finally, why is Abbott advocating a budget policy which directly contradicts the activities of his party in other states?

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Author: Mark Fletcher

Mark Fletcher is a Canberra-based blogger and policy wonk who writes about conservatism, atheism, and popular culture. Read his blog at OnlyTheSangfroid. He tweets at @ClothedVillainy

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