States: more often a brake on good government than on bad.

Paul Kelly, Editor-at-large | July 25, 2009

Article from: The Australian

IN an aggressive analysis, Liberal spokesman Tony Abbott reveals how much Kevin Rudd's 2007 public hospital takeover pledge shocked the Howard government and calls on the Liberal Party to abandon a century of history and embrace greater powers for the national government.

Abbott's argument is that John Howard, far from intruding on state powers, should have gone much further. Abbott's central proposition is that "the federation is broken and does need to be fixed". This is his conclusion from his experience as a federal minister and the main idea in his new book, Battlelines, that expounds a modern conservatism for the Liberal Party and seeks a new constitution for Australia.

For Abbott, Liberal Party attitudes on federalism are obsolete, divorced from public opinion and doomed to permanent policy failure. He is convinced that Rudd's new federalism also will fail and urges the Liberal Party to confront the crisis in Australian governance. Abbott argues the Howard government was locked into an unwinnable dilemma. It kept taking "hits for political problems that weren't its fault but which it had no way to fix". The public hospital dilemma, now facing the Rudd government, was the supreme example.

But there were many others. "Tackling the dysfunctional federation turned out to be a lost opportunity for the Howard government," Abbott says, alluding to serious disputes within the former government.

"One of the paradoxes of the 2007 election was the perverse way federal Labor benefited from state Labor's failures.

"When voters complained about poor public hospitals, public schools and public transport, John Howard correctly observed that these were state responsibilities. By contrast, Kevin Rudd capitalised on voters' anger by promising to work with the states to solve the problems that state government ineptitude had largely brought about."

For Abbott, Howard opened the door to the revolution. He says Howard approached gun laws, school curriculum and water policy in terms of "solving problems", rather than as an exercise in federal theory or constitutional niceties. Abbott's contempt for state governments that break deals, bolster trade union powers, run huge bureaucracies and refuse serious reforms is palpable. In Battlelines he wants Howard's philosophy to be taken to its next stage.

Abbott dramatises his argument by seeking a constitutional referendum that enables the national government to pass laws "for the peace, order and good government of the country". This means the national government could propose laws in any area free from the constraints of Section 51 of the Constitution. As Abbott says, his idea "wouldn't abolish the states" but would stop them from "jeopardising policy in areas where the national government was determined to intervene".

The mechanism would be similar to the "disallowance provisions" the commonwealth parliament has in relation to territory laws. Equipped with this power, the commonwealth would be better placed to impose policy directions on the states. Once the power existed, it would need to be used only in rare instances. This is a radical solution unlikely to win internal Liberal Party support or pass at referendum. Abbott says the message from Rudd's problems is obvious: fixing the federation is Australia's "biggest political problem" and will fall to the next Coalition government.

He argues the narrative from the Howard years cannot be avoided; in schools, health, water, mental health and disability services, "the states rarely delivered" despite federal funds. They are resistant to structural reform and neither bribery nor penalties works.

Abbott argues that economic prosperity under Howard only intensified public demands. People locked in traffic jams or waiting with distressed kids for hours in a public hospital just wanted their problems fixed. The pressure inevitably settled on the prime minister because people "expect the commonwealth to 'do something"'. He wants to purge the old-fashioned Liberal Party fixation with state rights and have a debate based on the experiences of the Howard era.

He says the people want "national leadership", not "constitutional purity".

Much of the present federalism debate is futile, Abbott asserts. Proposals usually mean giving the states more revenue powers or fewer spending responsibilities. He says: "The difficulty is that people are reluctant to give the states any more powers than they currently have and the states won't surrender anything without a trade-off. The only way to sort out responsibilities in areas where the two levels of government are both involved is to put one level of government in overall charge."

This would not be needed if competent state governments such as those of Nick Greiner or Jeff Kennett still existed. But those days are gone. The truth, Abbott says, is that the states are the 2nd XI of Australian politics and they "are much more often a brake on good government than on bad".

Abbott reveals that after Rudd's 2007 pledge to take over the public hospital system if improvements were not delivered, there was a Howard-Abbott-Peter Costello meeting in Howard's Sydney office to try to devise a response. Various alternatives were canvassed including "the 'mega' option of a full commonwealth government takeover".

Abbott says "in the end no decision was taken because there was no course of action which all three of us could agree".

"The truth was that the Howard government had become a prisoner of its record as all long-lived governments eventually do," he writes. "An immediate commonwealth (public hospital) takeover might have looked like responding to the other side. As well, it would have provoked the Liberal Party's 'anti-centralism' brigade, even though it was the states that had run hospitals from head office through giant unwieldy bureaucracies. At that stage anything dramatic would have been cast as an admission of public failure."

Compared with Rudd's bold headlines about a possible commonwealth takeover, the Howard government's takeover of a single hospital, the Mersey Hospital near Devonport, with the creation of a local board to run it, seemed a "second order change". Abbott wanted a radical assertion of commonwealth powers but never got it. The irony is that the Rudd government now seems unlikely to honour the expectations it created on public hospitals.

Aware of the criticism he will provoke, Abbott lays down two markers.

First, more commonwealth policy clout means less government bureaucracy, more privatisation and service delivery through private entities. Second, it means smaller government overall.

"There are very few problems in contemporary Australia that a dysfunctional federation doesn't make worse," Abbott says. "The state governments have a legal responsibility for issues which only the national government has the political authority and financial muscle to resolve. At present, the only effective way to improve public hospitals, for instance, or to allocate Murray-Darling water better or to establish a national school curriculum is for the commonwealth to bribe the states. All to often the states take the money but fail to deliver the outcomes.

"In large areas of our national life, no one is really in charge because the commonwealth funds the service but the state delivers it. Hence, in these areas, the state governments tend to wield power without responsibility while the commonwealth suffers responsibility without power."