23 September 2009

Lawyers Federalise as Occupational Health and Safety Bickers

There has been movement on two proposed national schemes.

Lawyers will join doctors, plumbers and real estate agents as professions that will operate under one set of rules, following a COAG decision made in February at the request of the Commonwealth.

At a speech in Perth on 17 September, the Attorney-General (Mr McClelland) said:

Australia now operates within a vastly different legal and economic landscape to that under which the present system of legal profession regulation developed.

Australian lawyers and consumers no longer operate in just one State or Territory.

To deliver a seamless national economy we can no longer justify such disparate regulation for just one profession.

If other professions in Australia can be regulated through a simple, unified, national structure there is no reason why the Australian legal profession should be an exception.

A better approach is required if we are to remain successful in the long-term – and given the wide variety of interests involved, we must think creatively about operating together in a Federation.

Given the undeniable economic imperative, the collective political will of COAG and good will from all stakeholders, I am sure we will be able to achieve an outcome that will deliver significant tangible benefits to not only the profession, but the Australian community in general.

He inveighed against the fact that consumers, lawyers and firms have to deal with nearly 5,000 pages of regulation, and indicated he hadn’t met one lawyer that has read, let alone digested all of this regulation.

Probably that’s because most practitioners operate in one jurisdiction, and consumers are only concerned about the laws relevant to their state and territory. This is a bit of a straw man, really.

Nevertheless, a National Legal Profession Taskforce has proposed the establishment of a National Legal Services Board – a joint state and territory entity that seems a cross between the proposed National Body anticipated by the IGA for Specified Professions and the National Boards to be established under the national registration and accreditation scheme for health professionals.

The Board would be a single standard-setter for all lawyers in Australia, constituting ‘key experts from differing backgrounds including legal practice, consumer protection (whatever that constitutes!) and the regulation of professions.'

It is to deal with issues relating to admission eligibility, the granting of practising certificates, practising entitlements and conditions, the form and manner in which practise is conducted, complaints handling and discipline,

So they retain their 'relevance', state bodies (including professional bodies) could perhaps be delegated responsibility to determine whether someone was eligible for either admission or a practising certificate.

During his speech, the Attorney said:

In short, in framing new national regulations, we need to keep in mind the experience the average punter has with the system and we need to consider how we can make that better.

A good test is to ask whether lawyers would be willing consumers of legal services.

Currently, I don’t think many would.

Actually, as an ‘average punter’, I don’t think the Australian legal system is operating that badly.

Nevertheless, one set of regulations from a board containing (amongst others) consumer protection experts will undoubtedly change it all.

A national scheme closer to fruition is that dealing with occupational health and safety.

As we noted earlier, WA indicated to the Workplace Ministers Ministerial Council in July that it had problems with penalty levels and right of access granted to unions under the proposed OHS package.

As the Australian reported on 22 September:

Mr Buswell (the WA Treasurer) said he supported elements of the Rudd government's reform agenda, but there was potential for unionists to do backroom deals to change the regulations over time. "Our view is that the changes the commonwealth are trying to implement are not good for Western Australia, not
good for employers nor employees in Western Australia and at this stage we're not going to be supporting it," he said.
"They're changes which we think open us up to a potential where Western Australian occupational safety and health is driven, potentially, by the sorts of backroom meetings and negotiations we've been seeing between the union movement and the government, and that's not good for Western Australia."

As we have also noted earlier, the unions aren’t necessarily thrilled with the proposed OHS package either.

The OHS package is the first real test of how the COAG executive federalism model will have to resolve disputes between stakeholders with clear and legitimate interests to protect. Unfortunately, there is no parliament to break these sort of impass.

It will be interesting to see how this pans out .... and whether the 'collective political will of COAG and good will from all stake holders' will last the distance with the creation of a national legal profession.

14 September 2009

Why is crossing the floor such a novelty?

Senator Judith Troeth recently crossed the floor to vote with the Government in support of their plan to stop charging asylum seekers and immigration detainees for their mandatory detention.

Immigration Minister Chris Evans lauded her for her decision.

On the same day, three ALP MPs endorsed a petition calling on the government to retain the prohibition on parallel importation of books.

It will be interesting to see if they cross the floor should the Government decide to remove the ban.

It is not often that ALP members cross the floor. This is because party rules prevent it.

In particular, Rule 5 says (in part):

d. The Federal Parliamentary Labor Party shall have authority in properly constituted Caucus meetings to make decisions directed towards establishing the collective attitude of the Parliamentary Party to any question or matter in the Federal Parliament, subject to:

i. at all times taking such action which may be possible to implement the Party's Platform and Conference decisions;

ii.on questions or matters which are not subject to National Platform or Conference or Executive decisions, the majority decision of Caucus being binding upon all members in the parliament; and

iii. no attitude being expressed which is contrary to the provisions of the Party Platform or any other decision of National Conference or National Executive

The existence of this rule in particular weakens the role of all Australian parliaments.

In Westminster, party whips divide votes into three categories.

In very trite terms:

a ‘one line whip' tells members what the party line is, however, there is a degree of discretion as to whether the line is followed;

a ‘two line whip’ is a debate in which a member is expected to vote in according to the party line, unless there is a strong conscientious objection; and

a ‘three line whip’ is a debate where the member should simply follow the party line.

However, all that said, there are many circumstances in which members of the House of Commons have 'rebelled' from the Whip and voted against party, notwithstanding the declaration of a three line whip.

Ask yourself: how often do you see an ALP member 'cross the floor' in Parliament? The answer is 'seldom' - and when they do, they are usually disciplined.

In that case, it is hardly surprising that the alternative political grouping becomes as rigidly controlled - if they weren’t, common sense tells you they would never win a parliamentary vote.

There are many circumstances where party discipline means that MPs are voting for a proposal against their better judgement.

The best way to ensure that legislation is appropriate is to ensure that there is a properly functioning parliament with members making decisions according to their conscience and not their party whip.

Matters may very well be assisted if the ALP abolished its rule.

Fifield vs. Abbott: the confused state of the Liberal Party on federalism

In a recent article for The Punch, Mitch Fifield wrote a copperplate defence of Australia’s federal model.

The principles of Federalism are timeless. Liberals believe in the principle of subsidiarity: that power, where possible, should be located as close as possible to the people so that it is responsive to their demands. Liberals are wary of concentrating power in the hands of a small number of people. Liberals also believe in checks and balances – abolishing or rendering state governments impotent would leave a federal administration’s power virtually unchallenged.

Liberals also believe in competition. States competing for jobs, investment and talent should lead to lower taxes, lighter regulations and more attractive communities to live in.

He had better have a chat with Tony Abbott, who has different views about the issue:

My proposal is not to abolish the states but a referendum to give the national parliament the same authority over them that it's long had over the territories. It's not a bid for more power to Canberra. Rather, it's an attempt to establish clear lines of accountability and responsibility.

The Liberal Party is the erstwhile party of federalism: it certainly is no longer the ‘states rights’ party, as the Howard Government’s use of the corporations power to federalise Australia’s industrial relations laws illustrates.

The Fifield/Abbott discussion is a healthy one to have whilst a party is in opposition.

However, as we have previously discussed the Henry Review will raise the issue of whether Australia should be viewed as a federation or a single market, whilst in our previous article we noted the idea of whether state parliaments have a role in setting standards will be challenged as interested stakeholders challenge one size fits all legislation designed to bring about a ‘seamless economy’.

Both these developments and the fact that Australia is slowly lurching towards a federal election means that the Liberal Party will need to have some view as to how they see the federation operating – perhaps far sooner than they imagine.

The challenge to the seamless economy commences

The ACTU is commencing a campaign against the harmonised OHS law being developed by Safework Australia on behalf of the Ministerial Council on Workplace Relations.

The Secretary of the ACTU (Mr Lawrence) said ‘the draft legislation was unacceptable and safety standards needed to be ''improved, not reduced in any shape or form''’.

The AMA is equally unhappy with the proposed legislation proposing to introduce a national registration scheme for health professionals, which in its view ‘fails the public interest test’.

These reforms form part of the ‘seamless economy’ agenda, which generally collapses eight laws developed at state or territory level into one law operating throughout Australia.

As we have said earlier:

As a general proposition, the ‘applied model’ of legislation – where one jurisdiction will develop and pass model legislation through its parliament with the remaining states or territories subsequently passing legislation that picks up the model legislation is the favoured way of introducing harmonised
legislation when regulating areas previously the province of states and territories.Whilst nominally capable to amend legislation, state parliaments – including those chambers without government majorities - have typically accepted the national legislation without batting an eyelid, on the grounds that ‘COAG decided’.
The COAG executive federalism model of public administration, in which state parliaments passively pass laws decided by either COAG as a body (or a ministerial council within the COAG structure) is now at an interesting stage of its operation.

This is because the legislation designed to implement the ‘seamless economy’ is now being rolled out - stakeholders are now challenging the merit of the contents of the finalised legislation.

This beggars the question: to which democratically elected body can these stakeholders appeal?

It can hardly be to those legislative chambers where the governments who form COAG have majorities.

So, the interesting thing will be whether the AMA and the ACTUs of the world actively lobby state parliaments for amendments to COAG approved harmonised legislation.

If so, it will be fascinating to see whether those parliamentary chambers where there are government minorities – the Legislative Assemblies of the ACT and the NT, the upper houses of NSW, Victoria, Tasmania and South Australia and both houses of the Western Australian Parliament (if the National Party can be persuaded to side with the ALP on a particular issue) – have the chutzpah to amend COAG legislation – particularly as it could cost their state money.

It will be finally interesting to see what the Liberal Party chooses to do in this situation. In most legislatures, it will be the vote of the Liberals that will determine whether an amendment will pass.

It would therefore be desirable for the Liberal view on the role of COAG and (more generally) the role of state parliaments as standard setters to be clarified. This will be discussed more in the next article.

03 September 2009

Unfixing Parliamentary Terms

John Della Bosca has had a fall.

The Sydney Morning Herald has made a call: Nathan Rees should go to the Governor and just go to the polls.

Many hanker for an early election. However, the presence of a fixed four year terms acts as a barrier.

The concept was introduced into NSW following an agreement between Nick Greiner and the independent members of Legislative Assembly following the 1991 election that produced a hung parliament.

The rationale is explained by Clover Moore, one of the independents who negotiated the agreement, where she says on her website:

My work to reform Parliament led to the current four year fixed terms of State Government, reducing the number of elections and the political manipulation of their timing.

The then government acknowledged the idea was one of a number of:

….changes to the framework of Government in New South Wales to respect a strong Parliament and to ensure the accountability of Executive Government to the Parliament are necessary.

The fixed term concept is now washing through the other Australian jurisdictions.

It strikes me the idea works from a wrong premise.

It presumes Australian Parliaments are strong. They are in fact quite weak. Party discipline is so strong that independent action by MPs is almost unheard of. What the Executive wants, the Executive gets.

For all intents and purposes, under NSW law a successful no confidence motion is necessary to bring about an election.

Short of a schism in the ALP, if the NSW Government really decided to bring an election some government members would have to tactically abstain from the vote.

This could be called the ‘Bundestag solution’.

Germany has the same sort of fixed term provisions as NSW.

In 2005, members of the German government abstained from voting in a confidence motion so that an election could be called following increased dissatisfaction with, and instability within, a coalition of the Social Democrats and the Greens.

However, query whether that would look fair dinkum to either the electorate or (for that matter) the Governor.

After all, the intention of fixed four year terms is to reduce the number of elections and the political manipulation of their timing.

And so, it would appear the NSW Government will be with us until 2011.

Fixed four year terms for a parliament weakened by rigid party discipline is poor public policy.

We do not believe in fixed terms.

There are some occasions where the capacity to call an election is desirable. For instance there could an issue that is so big that it is proper to call an election to decide on whether the policy is a good idea – a ‘back me or sack me’ election.

Alternatively, there could be civil unrest of some nature (like a series of strikes) such that it is appropriate to call a ‘who runs the country’ election.

However, you can’t really identify whether an issue is one of these sorts of issues in advance. Everything turns on the political context of the day.

That is not to deny that there is a legitimate expectation that a government will usually run to term, or that there will be parliamentary leaders who will go to the electorate for cynical political reasons.

However, we think the electorate is smarter than many in the political classes think. Anything that is particularly cynical will be punished. The last Western Australian election is probably case in point.

And in any regard, we don’t think that an exercise in democracy is a bad idea at any time.

We also think that 4 years is too long between elections.

It is probably right that 4 years is the common period for a parliament or elected official.

However, demand in many of these jurisdictions there is a capacity to easily call elections should circumstances arise.

In other circumstances, the electoral system is designed to ensure that the system’s overall electoral mandate remains fresh.

For example, Barack Obama is President of the United States for four years. However, the House of Representatives is elected for two years. One-third of the Senate is elected at the same time as the House of Representatives.

It therefore means that whatever Obama does will receive an electoral test every two years, not every four. Any policy overreach can be punished; proper policy rewarded.

If there is to be fixed terms, then a fixed three year term is probably appropriate.

However, we have always supported the erstwhile Australian system of unfixed three year terms.

We have never accepted the argument that four year terms are necessary because it would be too hard for politicians to implement contentious yet necessary policy reforms because of fear of electoral consequences.

The microeconomic reforms generally described as national competition policy (and now the National Reform Agenda) have led to significant changes to the structure of Australian society – all achieved by governments of different persuasions within a political system with unfixed three year terms.

There is also a case for allowing the upper house to block supply.

The NSW Legislative Council has not had the capacity to block supply since 1933.

However, there may be a case to return this power to the upper house so as to force an unpopular government to an election.

Some will reject this idea because of a wish to avoid the controversy that arose in 1975 following the refusal of supply by the Senate that ultimately led that led to the downfall of the Whitlam Government.

That said, the 1975 election led to the Coalition to win a clear parliamentary majority – however, the controversy surrounding the decision to block supply caused will ensure that an upper house would need to think long and hard before it decided to deny the Executive its appropriation.

No-one would want to have a political environment such as that currently operating in NSW.

Yet this is the unintended consequence of a policy design thought to be a good idea by participants in a hung parliament of nearly 20 years ago.

The policy experiment has failed. It must be reformed. We should go back to the future with unfixed three year elections.

The Henry Review and the Australian Federation - Defining the Debate

The previous two articles illustrate the two different ways one can view how Australia, as a federation, should function.

As we said in an earlier article:

Many will say …. Australia is an integrated common market, with people and companies commonly undertaking activities across state borders.

Moreover, Australia exists in a globalised world, with the complication of different rules in different states a reason not to come to Australia.

Regulatory difference is nothing more than a mere compliance costs that distort allocative efficiency with no public benefit.

In this case, there to be only one set of rules (usually encapsulated in legislation), preferably made by one legislative body – in our case, the Australian Parliament.

The states would have the role of (effectively) an English county council, concentrating on service provision based on national standards. However, there are alternative arguments.

The (few) supporters of a federal system argue that citizens benefit where there is genuine "competitive federalism" –the idea that different jurisdictions will make different rules and regulations and have different levels of taxation, with each jurisdiction ultimately picking up what is "best practice" or face the loss of people and investment.

A similar argument is one holding that States are "incubators of innovation" –a place where different ideas can be tried, with the good ones taken up in the bad ones discarded - and if an idea is really bad, the entire nation doesn’t have to face the consequences.
The contents of the Henry Review means the time is now right for a full political discussion of whether the nation should be viewed as a federation or a single market.

However, the decisions should not be made through the Governor’s Club of COAG.

Whilst a bureaucrat like Henry may see some advantages in going down this route, these massive reforms should be discussed by the elected representatives reflecting the interests of all political interests represented in Australian parliaments – and not just the representatives of the executives that have been drawn from them.

Ideally, early in 2010 there should be a full constitutional convention, drawn from the Australian legislatures in a manner similar to the conventions convened in the 1980’s by the Hawke Government, to fully discuss the issue of what is the role of state government of the 21st century, to flesh out the issues of the structure of the Australian federation.

From there, each of the major political parties should then set out policies that set out the appropriate role of a state in a 21st century federation (including the role of a state parliament) and the role of COAG within the Australian federation.

The winner of the 2010 election should then put their preferred view to another constitutional convention, from which appropriate constitutional amendments (that may not go as far as Tony Abbott is advocating) could be prepared for the consideration of the Australian people.

The Henry Review will be an important reference document as this debate proceeds. It will be interesting to see how the argument will pan out.