In his Challenges of Federation speech we referred to in a previous article, Prime Minister’s Department Secretary Terry Moran said:
There are business leaders who hold the view that Australia can’t work well unless states cede regulatory authority to the Commonwealth, and that as much as possible affairs should be run from the centre. Proponents of this view often see government as a giant corporation, where everything is subject to the power of the CEO. This is not an arrangement for stable and effective democratic government. It is a recipe for authoritarianism, and would be a long way from the liberal democratic ethos we now enjoy.
Yet this is how the Australian federal model operates.
In an earlier article we referred to Peter Phelps’ maiden speech to the NSW Legislative Council.
In another part of the speech he said:
The problem (with the Australian federal structure) is compounded by vertical fiscal imbalance or, to put it in the language of humans rather than economists, the States have the attitude of teenagers:
"Come on, dad, give us some more money.""Why don't you just get a job, son?""Aw, dad, now you're just being mean".
This puts the situation well.
The Intergovernmental Agreement on Federal Financial Relations provides:
The Commonwealth will provide National Partnership payments to the States and Territories to support the delivery of specified outputs or projects, to facilitate reforms or to reward those jurisdictions that deliver on nationally significant reforms or service delivery improvements.
The National Policy and Reform Objectives underwriting the Federal Financial Relations IGA reads:
National Partnership incentive payments will be provided to reward the States and Territories which deliver reform progress or continuous improvement in service delivery.
These payments will be structured in a way that encourages the achievement of ambitious milestones or performance benchmarks.
Graduated benchmarks may be specified in National Partnership agreements to provide that States receive some proportion of funding for activity that has not fully achieved the reform or service delivery objectives but has resulted in partial attainment of the agreed outcomes.
The achievement of milestones and performance benchmarks will be assessed by the independent COAG Reform Council, in order to provide transparency and enhance accountability in the performance assessment process.
National Partnerships should set out clear, mutually agreed and ambitious performance benchmarks that can be assessed by the COAG Reform Council. These should be structured in a way that encourages the achievement of ambitious reform targets and continuous improvement in service delivery, and provide better outcomes than would otherwise be expected.
A practical example of a ‘reward payment is clause 32 of the National Partnership Agreement to Deliver a Seamless National Economy which provides:
32. The Commonwealth will provide reward payments to the States and Territories following CRC advice as to the achievement of key milestones, as set out in the Implementation Plan for the 27 deregulation priorities. The maximum distribution of funds to be paid is set out in Table 1 above.
And as we referred to in an earlier article, the NSW Parliament passed reforms relating to directors liability because they were reforms as they were COAG reforms for which reward payments were payable for ‘meeting key milestones’ - and the NSW Government was keen to secure passage to win ‘brownie points’ for making the necessary changes to the law.
If the state’s play up the Feds won’t pay up.
And, despite the wishes of Terry Moran the Commonwealth is hardly slowing down the areas of public administration in which it wishes to become involved.
The last article discussed the grand bargain that never was.
It was a pity a succession struggle within the federal ALP derailed an attempt of a grand bargain.
We remain of the view there should be a grand bargain establishing:
1. which level of government should have responsibility for particular public policy areas;
2. what taxation bases should be assigned to the states and territories; and
3. where it is appropriate for the Commonwealth to be the level of government determining policy outcomes but is an area where it has no clear constitutional capacity to act, whether it is appropriate to confer Commonwealth power either:
(a) indirectly, through an agreement made under section 96 of the Constitution; or
(b) through a reference of power by the states to the Commonwealth or directly by constitutional amendment.
Clearly, the proposed tax forum to discuss the Henry Tax Review to be held on 4 and 5 October 2011 would be the perfect opportunity
Except it won’t happen.
The forum will apparently:
....continue the decade-long conversation we started with the release of Australia's Future Tax System (AFTS) Review last year. It will focus on the broad sweep of topics in the Review, with sessions to discuss personal tax, transfer payments, business tax, state taxes, environmental and social taxes, and system governance.
But won’t discuss the GST, areas of the Henry Review the Government has already indicated it won’t implement and most importantly what elements of the federation will perform which function.
This is a wasted opportunity.
28 June 2011
Bob Hawke and Nick Greiner's grand bargain
A grand bargain realigning state and federal taxation streams and responsibilities was mooted during the early 1990s.
The history was set out in the Victorian Parliament’s Federal-State Relations Committee Inquiry Into Overlap and Duplication of Roles and Responsibilities Between the Commonwealth and the State; and Areas of Responsibility for Which the States Should Have an Enhanced Role for the Benefits of the Federation:
6.22 The impetus for change to Australia’s federal system arose from a conjunction of political conditions. Bob Hawke, a Labor Prime Minister, and Nick Greiner, a Liberal Premier, shared common goals of microeconomic liberalisation and Commonwealth-State relations reform, as well as a common managerialist perspective on government. The fact that all the other State Premiers were Labor reduced differences among them over the agenda for change. The combination of a strong leader among the Premiers and a consensus oriented Prime Minister led to the adoption of a collaborative, consensual approach. This bipartisan, Commonwealth-State political commitment to the creation of a truly integrated national economy, and to the rationalisation of government roles, ensured momentum at the early stage.
6.23 The Hawke-Greiner partnership is symbolic of an implied comprehensive exchange. The microeconomic liberalisation that the Commonwealth was seeking would lead to uniformity of regulation, and a lessening of State intervention in the economy. In return for this reduction in their power, a realignment of roles and responsibilities, in combination with fiscal reform, would grant the States revenue and autonomy adequate to their expenditure responsibilities. The agenda was broader under Hawke than at any subsequent stage, and this comprehensive exchange seemed a real possibility.
6.24 This potential exchange collapsed in late 1991, with Paul Keating’s challenge to the Labor leadership. Keating sensed that Hawke did not have the support of the Labor caucus for fiscal and program devolution, and proceeded from late October 1991 to challenge Hawke largely on these grounds.
Keating's action dismayed the premiers. They read out consistent statements in their respective state parliaments.
For instance Wayne Goss told the Queensland Parliament:
……Twelve months ago (in 1990), a new process for reforming the Australian Federation was commenced in Brisbane. That process sought to rationalise the financial relationship between the Commonwealth and the States, to rationalise functional responsibilities between the various levels of Government in order to minimise duplication and to improve the economic efficiency of the country through the implementation of wide-ranging micro-economic reforms.
As the Prime Minister and the Premiers agreed in the Sydney communique, the Perth conference would— “consider the crucial and interrelated issues of reform of Commonwealth/State financial arrangements including reviewing the distribution of taxation powers to reduce vertical fiscal imbalance and a clearer definition of the roles and responsibilities of the respective Governments in the areas of program and service delivery . . .”
In preparation for the Perth conference the States, large and small, Labor and conservative, developed a position paper containing a range of proposed reforms. First and foremost, the States agreed on a shared national income tax proposal whereby an agreed percentage of national income tax receipts would be returned to the States. This was to be achieved by a parallel reduction in financial assistance grants to the States and a reduction by the same percentage in the Commonwealth income taxation rate. This meant no increased taxation burden for Australian taxpayers. This meant providing the States with access to a growing source of revenue capable of guaranteeing our delivery of crucial services into the future. This also meant no diminution in the Commonwealth’s capacity to manage the national economy.
Secondly, the States advocated the establishment of a council of the Australian Federation comprised of the heads of Government of the Commonwealth and the States. This body was to provide a continuing mechanism through which the range of micro-economic reforms already initiated in this process could be sustained in the future.
It was also to provide a means by which rational decisions could be taken on the future delineation of functional responsibilities between the two levels of Government. Most critically, this proposed council was to assist in lifting the vision of both the Commonwealth and the States above their own narrow and immediate interests and to concentrate instead on the pursuit of the national interest.
Yesterday in the Commonwealth Parliament the Prime Minister stated that the Commonwealth Government could not support the States’ “shared national income tax proposal”. However, in rejecting this option, the Commonwealth Government has not advanced any sound policy reason as to why this proposal is unacceptable. Indeed, a joint report prepared by the Commonwealth and State Treasuries indicated that proposals such as the one advocated by the States would result in a significant reduction in vertical fiscal imbalance without compromising the Commonwealth’s legitimate requirement to maintain macro-economic control and without violating the principles of fiscal equalisation.
Furthermore, the same Treasuries’ report notes that other successful federations, for example, the United States,Canada and West Germany, are able to manage their national economies with markedly lower levels of vertical fiscal imbalance than Australia.
Regrettably, my colleagues—the other Premiers—and I have concluded that the States’ taxation reform proposal has been jettisoned for reasons other than those of a policy nature. Notwithstanding last-minute discussions late yesterday and again today, it appears that the Commonwealth is immoveable on this point. Given this position, and given that the reform of Commonwealth/State financial relations is fundamental to the whole reform of Australian federalism, the States reluctantly concluded that it was impossible to proceed with the Perth conference. To do so would have been to yield sound policy to the requirements of political expediency. …..
Whilst the discussions that led to the implementation of the 1995 competition policy agreements continued, the opportunity of a ‘grand bargain’ was lost.
The history was set out in the Victorian Parliament’s Federal-State Relations Committee Inquiry Into Overlap and Duplication of Roles and Responsibilities Between the Commonwealth and the State; and Areas of Responsibility for Which the States Should Have an Enhanced Role for the Benefits of the Federation:
6.22 The impetus for change to Australia’s federal system arose from a conjunction of political conditions. Bob Hawke, a Labor Prime Minister, and Nick Greiner, a Liberal Premier, shared common goals of microeconomic liberalisation and Commonwealth-State relations reform, as well as a common managerialist perspective on government. The fact that all the other State Premiers were Labor reduced differences among them over the agenda for change. The combination of a strong leader among the Premiers and a consensus oriented Prime Minister led to the adoption of a collaborative, consensual approach. This bipartisan, Commonwealth-State political commitment to the creation of a truly integrated national economy, and to the rationalisation of government roles, ensured momentum at the early stage.
6.23 The Hawke-Greiner partnership is symbolic of an implied comprehensive exchange. The microeconomic liberalisation that the Commonwealth was seeking would lead to uniformity of regulation, and a lessening of State intervention in the economy. In return for this reduction in their power, a realignment of roles and responsibilities, in combination with fiscal reform, would grant the States revenue and autonomy adequate to their expenditure responsibilities. The agenda was broader under Hawke than at any subsequent stage, and this comprehensive exchange seemed a real possibility.
6.24 This potential exchange collapsed in late 1991, with Paul Keating’s challenge to the Labor leadership. Keating sensed that Hawke did not have the support of the Labor caucus for fiscal and program devolution, and proceeded from late October 1991 to challenge Hawke largely on these grounds.
Keating's action dismayed the premiers. They read out consistent statements in their respective state parliaments.
For instance Wayne Goss told the Queensland Parliament:
……Twelve months ago (in 1990), a new process for reforming the Australian Federation was commenced in Brisbane. That process sought to rationalise the financial relationship between the Commonwealth and the States, to rationalise functional responsibilities between the various levels of Government in order to minimise duplication and to improve the economic efficiency of the country through the implementation of wide-ranging micro-economic reforms.
As the Prime Minister and the Premiers agreed in the Sydney communique, the Perth conference would— “consider the crucial and interrelated issues of reform of Commonwealth/State financial arrangements including reviewing the distribution of taxation powers to reduce vertical fiscal imbalance and a clearer definition of the roles and responsibilities of the respective Governments in the areas of program and service delivery . . .”
In preparation for the Perth conference the States, large and small, Labor and conservative, developed a position paper containing a range of proposed reforms. First and foremost, the States agreed on a shared national income tax proposal whereby an agreed percentage of national income tax receipts would be returned to the States. This was to be achieved by a parallel reduction in financial assistance grants to the States and a reduction by the same percentage in the Commonwealth income taxation rate. This meant no increased taxation burden for Australian taxpayers. This meant providing the States with access to a growing source of revenue capable of guaranteeing our delivery of crucial services into the future. This also meant no diminution in the Commonwealth’s capacity to manage the national economy.
Secondly, the States advocated the establishment of a council of the Australian Federation comprised of the heads of Government of the Commonwealth and the States. This body was to provide a continuing mechanism through which the range of micro-economic reforms already initiated in this process could be sustained in the future.
It was also to provide a means by which rational decisions could be taken on the future delineation of functional responsibilities between the two levels of Government. Most critically, this proposed council was to assist in lifting the vision of both the Commonwealth and the States above their own narrow and immediate interests and to concentrate instead on the pursuit of the national interest.
Yesterday in the Commonwealth Parliament the Prime Minister stated that the Commonwealth Government could not support the States’ “shared national income tax proposal”. However, in rejecting this option, the Commonwealth Government has not advanced any sound policy reason as to why this proposal is unacceptable. Indeed, a joint report prepared by the Commonwealth and State Treasuries indicated that proposals such as the one advocated by the States would result in a significant reduction in vertical fiscal imbalance without compromising the Commonwealth’s legitimate requirement to maintain macro-economic control and without violating the principles of fiscal equalisation.
Furthermore, the same Treasuries’ report notes that other successful federations, for example, the United States,Canada and West Germany, are able to manage their national economies with markedly lower levels of vertical fiscal imbalance than Australia.
Regrettably, my colleagues—the other Premiers—and I have concluded that the States’ taxation reform proposal has been jettisoned for reasons other than those of a policy nature. Notwithstanding last-minute discussions late yesterday and again today, it appears that the Commonwealth is immoveable on this point. Given this position, and given that the reform of Commonwealth/State financial relations is fundamental to the whole reform of Australian federalism, the States reluctantly concluded that it was impossible to proceed with the Perth conference. To do so would have been to yield sound policy to the requirements of political expediency. …..
Whilst the discussions that led to the implementation of the 1995 competition policy agreements continued, the opportunity of a ‘grand bargain’ was lost.
The Challenges of Federalism
As a broad policy issue federalism is bubbling away.
One bubble about the burst is the decision of the Government to impose a minerals mining resource tax.
The tension arises because one element of the scheme is the provision of a full credit for state royalties paid by a miner.
To limit this exposure, the Feds have been stepping up the pressure on states not to increase royalty rates payable on the extraction of minerals – one of the few ‘own source’ revenues remaining to state level governments.
This is irksome to Western Australia, which relies heavily on royalties revenue.
As Ken Wilshire said in a recent opinion piece:
This is no way to run a federation. Ask the Canadians, who have long faced the challenge of maintaining balance between their resource-rich western provinces and Ottawa. The difference there is that the provinces have a clear and appropriate taxation base. In Canada, as in every federation in the world except Australia, the states have full income taxation powers. (Resource-rich Alberta, home of Prime Minister Stephen Harper, has often had the lowest income taxes made possible by resources taxes.) And progressive federations such as Germany have tax sharing arrangements of a rational nature.
All this points to the way forward for Australia. The forthcoming tax summit must discuss federal finances and especially the hopeless vertical financial imbalance because of the dominance of the national government in taxation. This will forever divide the nation if not corrected. It is badly distorting the accountability of all governments to their electors.
Henry Ergas has said similar things:
The states' abject financial dependence on the commonwealth causes constant conflicts and inefficiencies, while the redistribution of tax revenues from richer to poorer states has reduced the states' incentive and ability to adjust to changing circumstances.
On 8 June 2011 the Secretary of the Prime Minister’s Department (Terry Moran) gave a speech called the Challenges of Federalism.
He largely lauded the 2008 Intergovernmental Agreement on Federal Financial Relations which established an institutional framework as the basis to establish jurisdictional cooperation.
He then listed three things the States could do:
First, the states should continue to work with the Commonwealth to ensure the Intergovernmental Agreement achieves its goal of focused, incentive-based program delivery.
This is especially important in health, education, skills and workforce development, disability services, affordable housing and indigenous reform.
Second, the states should engage seriously with the review of Horizontal Fiscal Equalisation, and ensure the incentives in the arrangements are consistent with good governance and continuing reform.
And, third, the states should deliver on the promise they made when the GST was introduced, to reform their own tax bases in return for the stability of funding it provides.
Unless the states can rise to these challenges, there is a risk that the public will expect the Commonwealth to be more assertive in dealing with them – and that poses the risks of weakening the connection between government and citizens at the local level.
He then listed three things the Feds could do:
First, the Commonwealth must continue to restrain its tendency to control an excessive number of inputs on national Specific Purpose Payments.
Second, the Commonwealth should allow for and support localised approaches to reform, and rely less on all-embracing boilerplate policies and programs once the basic system architecture is agreed.
And, third, the Commonwealth should move towards strategic partnerships with the states and territories where it makes sense to share accountability for outcomes.
Moran finally mentioned a concept of the ‘grand deal’.
The concept of a grand bargain has an interesting history. In 1976, Malcolm Fraser sought to counter what he saw as the excesses of the Whitlam years with a proposal to share the income tax base, providing the states with a more reliable source of revenue. Bob Hawke tried again in 1990 and 1991 with a different proposal: taxation powers would be reallocated in return for the states taking clear responsibility for particular areas of policy, including some areas within the Commonwealth’s authority. That proposal was fateful – or should I say fatal, at least for Bob Hawke, after Paul Keating used it as a weapon in his fight with Hawke for the prime ministership.
There is indeed a history to the ‘grand bargain’. It is reviewed in the next article, followed by an article that proposes how the federalism debate can advance.
One bubble about the burst is the decision of the Government to impose a minerals mining resource tax.
The tension arises because one element of the scheme is the provision of a full credit for state royalties paid by a miner.
To limit this exposure, the Feds have been stepping up the pressure on states not to increase royalty rates payable on the extraction of minerals – one of the few ‘own source’ revenues remaining to state level governments.
This is irksome to Western Australia, which relies heavily on royalties revenue.
As Ken Wilshire said in a recent opinion piece:
This is no way to run a federation. Ask the Canadians, who have long faced the challenge of maintaining balance between their resource-rich western provinces and Ottawa. The difference there is that the provinces have a clear and appropriate taxation base. In Canada, as in every federation in the world except Australia, the states have full income taxation powers. (Resource-rich Alberta, home of Prime Minister Stephen Harper, has often had the lowest income taxes made possible by resources taxes.) And progressive federations such as Germany have tax sharing arrangements of a rational nature.
All this points to the way forward for Australia. The forthcoming tax summit must discuss federal finances and especially the hopeless vertical financial imbalance because of the dominance of the national government in taxation. This will forever divide the nation if not corrected. It is badly distorting the accountability of all governments to their electors.
Henry Ergas has said similar things:
The states' abject financial dependence on the commonwealth causes constant conflicts and inefficiencies, while the redistribution of tax revenues from richer to poorer states has reduced the states' incentive and ability to adjust to changing circumstances.
On 8 June 2011 the Secretary of the Prime Minister’s Department (Terry Moran) gave a speech called the Challenges of Federalism.
He largely lauded the 2008 Intergovernmental Agreement on Federal Financial Relations which established an institutional framework as the basis to establish jurisdictional cooperation.
He then listed three things the States could do:
First, the states should continue to work with the Commonwealth to ensure the Intergovernmental Agreement achieves its goal of focused, incentive-based program delivery.
This is especially important in health, education, skills and workforce development, disability services, affordable housing and indigenous reform.
Second, the states should engage seriously with the review of Horizontal Fiscal Equalisation, and ensure the incentives in the arrangements are consistent with good governance and continuing reform.
And, third, the states should deliver on the promise they made when the GST was introduced, to reform their own tax bases in return for the stability of funding it provides.
Unless the states can rise to these challenges, there is a risk that the public will expect the Commonwealth to be more assertive in dealing with them – and that poses the risks of weakening the connection between government and citizens at the local level.
He then listed three things the Feds could do:
First, the Commonwealth must continue to restrain its tendency to control an excessive number of inputs on national Specific Purpose Payments.
Second, the Commonwealth should allow for and support localised approaches to reform, and rely less on all-embracing boilerplate policies and programs once the basic system architecture is agreed.
And, third, the Commonwealth should move towards strategic partnerships with the states and territories where it makes sense to share accountability for outcomes.
Moran finally mentioned a concept of the ‘grand deal’.
The concept of a grand bargain has an interesting history. In 1976, Malcolm Fraser sought to counter what he saw as the excesses of the Whitlam years with a proposal to share the income tax base, providing the states with a more reliable source of revenue. Bob Hawke tried again in 1990 and 1991 with a different proposal: taxation powers would be reallocated in return for the states taking clear responsibility for particular areas of policy, including some areas within the Commonwealth’s authority. That proposal was fateful – or should I say fatal, at least for Bob Hawke, after Paul Keating used it as a weapon in his fight with Hawke for the prime ministership.
There is indeed a history to the ‘grand bargain’. It is reviewed in the next article, followed by an article that proposes how the federalism debate can advance.
12 June 2011
OHS and NOLS - a rockier passage for seamless economy national schemes?
As we have previously discussed, the COAG process is an exercise in ‘executive federalism’.
When it comes to 'seamless economy' national schemes, the relevant Ministerial Council signs off on legislation that is then usually rubber stamped by state parliaments with nary a change, because ‘COAG said’.
However there have been some signs that state parliaments may be less inclined to acquiese.
States and territories are introducing legislation that broadly introduces the model Work Health and Safety Act agreed by the Workplace Relations Ministerial Council (the WMRC).
We have previously noted the relevant intergovernmental agreement permitted some variation from the model legislation provided it doesn't ‘materially affect the operation of the model legislation’.
A major commitment of the incoming NSW Government was to implement the model law as agreed.
This meant not re-enacting some current NSW provisions, including the ability of unions commencing OHS prosecutions, hearing OHS cases in specialist industrial courts rather than courts of general jurisdiction, the reversal of the onus of proof and the effective imposition of absolute liability on employers.
However, the Shooters and Fishers Party were successful in moving some amendments in the Legislative Council.
As the party’s leader said:
In the event, unions will be able to prosecute in some circumstances (but not claim a moiety or bounty) and some prosecutions will still be heard in the Industrial Court rather than the Local and District courts.
In South Australia, the model bill was introduced and then withdrawn by the Government in the Legislative Council.
This was because there was some dissention about the ambit of the primary duty of care imposed by the legislation.
The model bill imposes a general duty on people conducting a business or undertaking to take all reasonable steps to ensure health and safety.
However, some argue this duty should be restricted to duty holders who have ‘control' over the relevant workplace.
It is understood the Government may not have got the bill as introduced through the Council.
However, an unamended bill was reintroduced into the House of Assembly on 19 May 2011.
So it will be interesting to see if the opposition to the terms of the model law will be sustained.
Western Australia is considering the Occupational National Law Bill 2011.
This is an ‘applied’ law - where one jurisdiction passes a 'template’ law (in this case, Victoria), and the others adopt that law as a law of the jurisdiction.
Sadly, the WA Legislative Council Uniform Legislation and Statutes Review Committee hated the law, saying:
When it comes to 'seamless economy' national schemes, the relevant Ministerial Council signs off on legislation that is then usually rubber stamped by state parliaments with nary a change, because ‘COAG said’.
However there have been some signs that state parliaments may be less inclined to acquiese.
States and territories are introducing legislation that broadly introduces the model Work Health and Safety Act agreed by the Workplace Relations Ministerial Council (the WMRC).
We have previously noted the relevant intergovernmental agreement permitted some variation from the model legislation provided it doesn't ‘materially affect the operation of the model legislation’.
A major commitment of the incoming NSW Government was to implement the model law as agreed.
This meant not re-enacting some current NSW provisions, including the ability of unions commencing OHS prosecutions, hearing OHS cases in specialist industrial courts rather than courts of general jurisdiction, the reversal of the onus of proof and the effective imposition of absolute liability on employers.
However, the Shooters and Fishers Party were successful in moving some amendments in the Legislative Council.
As the party’s leader said:
If politics is the art of the achievable this is the best that we believe could be achieved in terms of a middle ground between both starting positions, that is, what the Government, farmers and business wanted and what the unions wanted. A number of issues raised with us have been considered by our party in coming to our position.
The Shooters and Fishers Party supports the concept of harmonising occupational health and safety laws in New South Wales with those in the rest of Australia. This gives effect to a Council of Australian Governments [COAG] agreement signed on 3 July 2008, when each State and Territory agreed to develop and implement uniform national occupational health and safety laws by December 2011.
At the same time we recognise that there will be minor differences between States and Territories. I believe that most members of this House and the Legislative Assembly would acknowledge the unique position of the New South Wales economy in the Commonwealth, and it is imperative for all of us to maintain and develop the competitive position of New South Wales in respect of other States and Territories.
In the event, unions will be able to prosecute in some circumstances (but not claim a moiety or bounty) and some prosecutions will still be heard in the Industrial Court rather than the Local and District courts.
In South Australia, the model bill was introduced and then withdrawn by the Government in the Legislative Council.
This was because there was some dissention about the ambit of the primary duty of care imposed by the legislation.
The model bill imposes a general duty on people conducting a business or undertaking to take all reasonable steps to ensure health and safety.
However, some argue this duty should be restricted to duty holders who have ‘control' over the relevant workplace.
It is understood the Government may not have got the bill as introduced through the Council.
However, an unamended bill was reintroduced into the House of Assembly on 19 May 2011.
So it will be interesting to see if the opposition to the terms of the model law will be sustained.
Western Australia is considering the Occupational National Law Bill 2011.
This is an ‘applied’ law - where one jurisdiction passes a 'template’ law (in this case, Victoria), and the others adopt that law as a law of the jurisdiction.
Sadly, the WA Legislative Council Uniform Legislation and Statutes Review Committee hated the law, saying:
1.2 The Bill does not introduce national occupational licensing. It proposes a process for developing a national licensing system. Other than that, it largely consists of a list of matters about which regulations may be made. It is not uncommon for uniform legislative schemes to leave detail to regulations. However, the Bill goes beyond this. It requires the substance of the licensing scheme to be in regulations.
1.3 Given this, it is particularly important that the Bill meet minimum standards for good legislation. It should provide a reasonable degree of certainty and coherence as to the legislative framework , to which the regulation-making powers relate. The Bill does not meet this standard. It lacks clarity. Too often the Bill is silent. Too much is still to be developed. Too many options are left open. Too much is left to regulations. The Bill is not clear on what is permitted and what is not, what is to occur and what is not.
1.4 As a result, it is not clear whether the Bill asks Parliament to delegate its legislation making power (to a Ministerial Council) in respect of the proposed licensing system or abrogate it.
Other jurisdictions have passed the law, although in most the law has yet to be proclaimed – that is, it is not in operation.
Proposed draft occupational licensing regulations for the occupations regulated by the so-called NOLS scheme (ranging from real estate agents to refrigeration mechanics) are about to be released.
It will be interesting to see that whether, following consideration of the regulations stakeholders and governments will be happy to see NOLS continue as proposed.
It is finally noted the South Australian House of Assembly has been given notice to consider providing the parliament’s Legislative Review Committee a reference to develop a process to consider ‘the issue of sovereignty separate to any other debate on a bill, thereby avoiding unnecessary debate on this issue in parliament and instead enabling the debate to focus on the purposes and content of a bill.’
This is because:
(o)n many an occasion when a bill has sought to apply a law scheme from another jurisdiction—the most recent example I am aware of is the Controlled Substances (Therapeutic Goods and Other Matters) Amendment Bill—the issue of sovereignty is raised and an unnecessary amount of time is spent debating constitutional law issues instead of debating the purposes and content of the bill.
During the debate on that piece of legislation, and one other, I said to the member for Morphett—because I understand the issues being raised by the opposition in terms of sovereignty—'How about we refer the matter to the Legislative Review Committee to see if it can come up with an appropriate way of dealing with these types of measures so that we can reach some consensus about how to do it?' So, that is what I seek to do. The I advice I have is that, given the nature of what I am asking the Legislative Review Committee to do, it has to go through both houses of parliament, so I commend this motion to the house.
Unfortuately the reference lacks clarity.
The issue of whether a state should yield (or if a European Union fanatic, 'pool') sovereignty with other jurisdictions is a threshold issue when considering whether a particular Bill has merit. It is difficult ot divorce this consideration from others.
Perhaps the question is whether the South Australian Parliament should either create, or clothe the Legislative Review Committee with responsibility for, the functions discharged by the WA Legislative Council’s Uniform Legislation and Statutes Review Committee.
It would be appropriate to have the matter clarified, as this reference could play an important national role as a mechanism that can assess the appropriateness of the model law and applied law models of implementing ‘seamless economy’ national legislative schemes.
Is harmonisation a euphemism for subjugation of the states?
Peter Phelps is a new member of the NSW Legislative Council.
As is the wont of maiden (or, as they are now grandly called, so as not to offend maidens, inaugural) speeches, the new member canvassed a number of different issues.
Perhaps unusually for a state MP making his first speech, he wondered about the point of maintaining the concept of provincial government, making some of the usual observations:
The reason for introducing the legislation was because:
As is the wont of maiden (or, as they are now grandly called, so as not to offend maidens, inaugural) speeches, the new member canvassed a number of different issues.
Perhaps unusually for a state MP making his first speech, he wondered about the point of maintaining the concept of provincial government, making some of the usual observations:
Whether through grand design or humorous coincidence the very next business in the Council was the thrillingly named Miscellaneous Acts Amendment (Director’s Liability) Bill 2011What relevance do the States then have? Not much by any assessment. They are too small to encompass the cultural and too large to encompass genuine communities of interest. To that end, Alex Hawke, who is in the public gallery today, kindly faxed me a copy of Jack Lang's 1930 Abolition Bill, with the suggestion that it would be an excellent first private member's bill for me to introduce. I doubt whether I will be taking him up on that offer at this time.
But if we are just going to be a way station for the Federal Government and its dictat, then why not? Why not abolish the Legislative Council and the Legislative Assembly. Why not abolish the State Government entirely? What purpose do we serve if we are straight-jacketed within federally mandated systems of education, water, land use, fishing, and environmentalism? Since the engineers case, the High Court has permitted a gradual accretion of power and interference in State matters.
Harmonisation has become a euphemism for subjugation. What is the use of this? Are we simply an imperial bauble perched atop a colonial anachronism, the errand boys of the Federal Government? If States are to remain relevant we must fight for real competitive federalism—not cooperative federalism—with genuine competition between the States, not this collectivist begging bowl approach. If you want to be a pot smoking Mullumbimby hippie, fine—but do not expect me to subsidise your lifestyle. Similarly, if a State has resources that are left unused, why should it expect us to subsidise a lifestyle for which it is unwilling to pay? If the distribution of revenue to the States was done on the basis of direct parity with its collection, then fine. It is not perfect but at least it would be a just outcome. But at this time horizontal fiscal equalisation, as it is called, is just an excuse to rob the productive to pay the lazy.
The reason for introducing the legislation was because:
(t)hese amendments will ensure that New South Wales legislation imposing this type of liability accords with the set of principles agreed by the Council of Australian Governments [COAG] to guide the reform and harmonisation of directors' liability across Australian law.
As the Attorney-General said in the Legislative Assembly:
I thank honourable members for their contributions to the debate. In particular I thank the member for Liverpool, who said the Opposition does not oppose the legislation, which we are pleased about because it is important Council of Australian Governments [COAG] legislation. In response to the member for Liverpool, these reforms are part of a COAG National Partnership Agreement under which there are reward payments to the States for achieving key milestones.
One of these key milestones was for legislation implementing these reforms by December 2010. The Liberal-Nationals Government was not in office at that time. However, perhaps we can get some brownie points, because these milestones may be reviewed by COAG and there may be a second tranche of reforms at a later stage.....
Somewhat proves Phelps’ point, really.
There have been some developments in the federalism debate recently. They are discussed in the next couple of articles.
The ALP after the NSW election - facing the Canadian conundrum?
The Greens subsequently won the seat of Balmain following the publication of the previous article.
However, ultimately the coalition now holds 42 seats on margins above 20%, with the ALP requiring a swing of 16.5% to win next time.
The Libs now hold some extraordinary seats by extraordinary margins. They include Londonderry (13.1%), Penrith (16.3%), Riverstone (20.3%) and, even more remarkably, seats like Campbelltown (3.4%) and Smithfield (4.8%).
They highlight the dilemma the ALP has in trying to square representing both working people and the inner urban ‘progressive’ professionals.
John Faulkner recently had (another) go at prescribing a solution when he delivered the Wran lecture.
As Simon Benson observed in the Daily Telegraph:
That is one view. Benson himself thought the real problem for the ALP was:
As Peter Hartcher said in an opinion piece following Faulkner’s speech:
For many years the Canadian Liberals acted as the dominant ‘brokerage’ party, with long periods of government. By monopolising the centre (and centre left) it usually pushed the conservative parties (as constituted from time to time) to the extremes.
However, following a loss of government the Liberals became increasingly trapped between a successful Conservative Party and the New Democrats, a progressive party perhaps best described as what a combination of the ALP left and the Greens would look like.
The Liberals suffered the worst outcome imaginable:
This could be the federal fate of the ALP if Tony Abbott commences to concentrate on values than being the party of ‘no’ and if the Labor fails to reform itself.
The question is – can Labor?
The (second most) recent appointment to the NSW Legislative Council was Walt Secord.
As the Sun Herald reports:
In NSW at least, until Labor change the view that the best government is drawn from from a parliament of the nomenklatura they face a long time in the wilderness
However, ultimately the coalition now holds 42 seats on margins above 20%, with the ALP requiring a swing of 16.5% to win next time.
The Libs now hold some extraordinary seats by extraordinary margins. They include Londonderry (13.1%), Penrith (16.3%), Riverstone (20.3%) and, even more remarkably, seats like Campbelltown (3.4%) and Smithfield (4.8%).
They highlight the dilemma the ALP has in trying to square representing both working people and the inner urban ‘progressive’ professionals.
John Faulkner recently had (another) go at prescribing a solution when he delivered the Wran lecture.
As Simon Benson observed in the Daily Telegraph:
Faulkner's thesis centres on a belief that the reason Labor's membership has disappeared was not only as a result of the cancerous machine-dominated process of preselections but because they failed to engage on left issues, causing a leakage of future Labor activists to fringe organisations like Get Up…….
If Labor had not been afraid to embrace Left-wing issues before the election, people would not have voted Green.
That is one view. Benson himself thought the real problem for the ALP was:
….the political dead weight of the trade union movement.Another view.
When they represented the bulk of the workforce they had legitimacy in the ALP. At their current 15 per cent - the majority of which are in public sector unions - they have a diminished legitimacy.
As Peter Hartcher said in an opinion piece following Faulkner’s speech:
Labor is now in an existential crisis. For the first time, it has a serious political challenger capable of taking seats from its left, as well as the traditional enemy on the right, the Coalition.The worst case scenario is that Labor will face the ‘Canadian conundrum’.
If an elector wants to vote for a conservative party, she can vote for a real conservative party, the Liberals. If an elector wants to vote for a progressive party, he can vote for a real progressive party, the Greens.
Why vote for the one in the middle? Only 31 per cent of voters would bother, according to the latest Herald Nielsen poll, and that's about 9 percentage points fewer than Labor needs if it hopes to stand for election as a party capable of governing in its own right.
For many years the Canadian Liberals acted as the dominant ‘brokerage’ party, with long periods of government. By monopolising the centre (and centre left) it usually pushed the conservative parties (as constituted from time to time) to the extremes.
However, following a loss of government the Liberals became increasingly trapped between a successful Conservative Party and the New Democrats, a progressive party perhaps best described as what a combination of the ALP left and the Greens would look like.
The Liberals suffered the worst outcome imaginable:
Then came the unexpected surge of the NDP, and Conservative Leader Stephen Harper’s eleventh-hour appeal to Liberal voters with economically conservative leanings, often called blue Liberals. “Let me speak very clearly to traditional Liberal voters: I know many of you do not want NDP policies. That you do not want NDP tax hikes,” Mr. Harper said on Sunday.
The message: Only we can protect your prosperity.
The result is that the Conservatives were able to achieve in 2011 what eluded them in 2008, a coalition of economically conservative-minded voters who cast their ballots based on pocketbook issues rather than concerns over cultural issues, including the Tories’ supposed leanings toward social conservatism.
Those blue Liberals were the missing element in the Conservative coalition. In the 1990s, they were the foundation of the successive Liberal sweeps of Ontario. So long as they remained with the Liberals, Mr. Harper would be shut out of the urban heart of most big Canadian cities.
But the rise of the NDP, which siphoned off progressive-minded Liberals, clearly spooked a sizable number of blue Liberals, causing them to bolt to Mr. Harper in the last weekend of campaigning...
This could be the federal fate of the ALP if Tony Abbott commences to concentrate on values than being the party of ‘no’ and if the Labor fails to reform itself.
The question is – can Labor?
The (second most) recent appointment to the NSW Legislative Council was Walt Secord.
As the Sun Herald reports:
After he left Carr's office, Hawker gave Secord work at his Labor-aligned lobbyist firm Hawker Britton before parachuting him into Rudd's office in Canberra 12 months before the Kevin07 campaign. Straight after the historic win for Labor, Secord was moved (some say shafted) to the office of Justine Elliot, the then minister for ageing, before returning to Sydney in 2009 to work briefly for treasurer Eric Roozendaal and then Keneally.and:
Keneally describes Secord as ''among Australia's best'' political and media operators but also ''policy smart''....
Liberals are happy to see Secord in the upper house where he will be joined by the former primary industries minister Steve Whan, who lost his seat of Monaro but will be parachuted into the Legislative Council to raise the ALP's leadership stocks.
“Having Walt Secord and Steve Whan taking up seats is just more proof that Labor talks about renewal but still hasn't acted upon the talk,'' says the Liberal source.
In NSW at least, until Labor change the view that the best government is drawn from from a parliament of the nomenklatura they face a long time in the wilderness
Further reflections on the NSW election
The Greens subsequently won the seat of Balmain following the publication of the previous article.
However, ultimately the coalition now holds 42 seats on margins above 20%, with the ALP requiring a swing of 16.5% to win next time.
The Libs now hold some extraordinary seats by extraordinary margins. They include Londonderry (13.1%), Penrith (16.3%), Riverstone (20.3%) and, even more remarkably, seats like Campbelltown (3.4%) and Smithfield (4.8%).
They highlight the dilemma the ALP has in trying to square representing both working people and the inner urban ‘progressive’ professionals.
John Faulkner recently had (another) go at prescribing a solution when he delivered the Wran lecture.
As Simon Benson observed in the Daily Telegraph:
Faulkner's thesis centres on a belief that the reason Labor's membership has disappeared was not only as a result of the cancerous machine-dominated process of preselections but because they failed to engage on left issues, causing a leakage of future Labor activists to fringe organisations like Get Up…….
If Labor had not been afraid to embrace Left-wing issues before the election, people would not have voted Green.
That is one view. Benson thought the real problem for the ALP was:
….the political dead weight of the trade union movement.
When they represented the bulk of the workforce they had legitimacy in the ALP. At their current 15 per cent - the majority of which are in public sector unions - they have a diminished legitimacy.
Another view.
As Peter Hartcher said in an opinion piece following Faulkner’s speech:
Labor is now in an existential crisis. For the first time, it has a serious political challenger capable of taking seats from its left, as well as the traditional enemy on the right, the Coalition.
If an elector wants to vote for a conservative party, she can vote for a real conservative party, the Liberals. If an elector wants to vote for a progressive party, he can vote for a real progressive party, the Greens.
Why vote for the one in the middle? Only 31 per cent of voters would bother, according to the latest Herald Nielsen poll, and that's about 9 percentage points fewer than Labor needs if it hopes to stand for election as a party capable of governing in its own right.
The worst case scenario is that Labor will face the ‘Canadian conundrum’.
For many years the Canadian Liberals acted as the dominant ‘brokerage’ party, with long periods of government. By monopolising the centre (and centre left) it usually pushed the conservative parties (as constituted from time to time) to the extremes.
However, following a loss of government the Liberals became increasingly trapped between a successful Conservative Party and the New Democrats, a progressive party perhaps best described as what a combination of the ALP left and the Greens would look like.
The Liberals suffered the worst outcome imaginable:
Then came the unexpected surge of the NDP, and Conservative Leader Stephen Harper’s eleventh-hour appeal to Liberal voters with economically conservative leanings, often called blue Liberals. “Let me speak very clearly to traditional Liberal voters: I know many of you do not want NDP policies. That you do not want NDP tax hikes,” Mr. Harper said on Sunday.
The message: Only we can protect your prosperity.
The result is that the Conservatives were able to achieve in 2011 what eluded them in
2008, a coalition of economically conservative-minded voters who cast their ballots based on pocketbook issues rather than concerns over cultural issues, including the Tories’ supposed leanings toward social conservatism.
Those blue Liberals were the missing element in the Conservative coalition.
In the 1990s, they were the foundation of the successive Liberal sweeps of Ontario. So long as they remained with the Liberals, Mr. Harper would be shut out of the urban heart of most big Canadian cities.
But the rise of the NDP, which siphoned off progressive-minded Liberals,clearly spooked a sizable number of blue Liberals, causing them to bolt to Mr.Harper in the last weekend of campaigning....
This could be the fate of the ALP if Tony Abbott commences to concentrate on values than being the party of 'no and if Labor fails to reform itself.
The question is – can Labor?
The (second most) most recent Labor appointment to the NSW Legislative Council was Walt Secord.
As the Sun Herald reports:
After he left Carr's office, Hawker gave Secord work at his Labor-aligned lobbyist firm Hawker Britton before parachuting him into Rudd's office in Canberra 12 months before the Kevin07 campaign. Straight after the historic win for Labor, Secord was moved (some say shafted) to the office of Justine Elliot, the then minister for ageing, before returning to Sydney in 2009 to work briefly for treasurer Eric Roozendaal and then Keneally.
Keneally describes Secord as ''among Australia's best'' political and media operators but also ''policy smart''
and:
Liberals are happy to see Secord in the upper house where he will be joined by the former primary industries minister Steve Whan, who lost his seat of Monaro but will be parachuted into the Legislative Council to raise the ALP's leadership stocks.
“Having Walt Secord and Steve Whan taking up seats is just more proof that Labor talks about renewal but still hasn't acted upon the talk,'' says the Liberal source.
Quite.
UPDATE
Antony Green has conducted an analysis on the NSW election which includes observations such as:
- the Coalition's 2-party preferred vote was 75.7% in country NSW, 62.0% in Sydney and even 53.9% in the industrial seats of the Hunter and Illawarra;
- in the Hunter Valley, Labor's primary vote was 32.9%, against 33.1% for the Liberal Party and 2.1% for the Nationals;
- the Liberal Party polled 50.6% of the first preference vote in greater a Sydney as opposed to 28.3% for Labor;.
- the Liberal Party even won a majority of the vote in Western Sydney, a first preference vote of 43.5% to 36.6% for Labor, a Liberal 2-party vote of 53.8%; and
- the Labor first preference vote was in single figures in seven electorates.
Truly a terrible result.
However, ultimately the coalition now holds 42 seats on margins above 20%, with the ALP requiring a swing of 16.5% to win next time.
The Libs now hold some extraordinary seats by extraordinary margins. They include Londonderry (13.1%), Penrith (16.3%), Riverstone (20.3%) and, even more remarkably, seats like Campbelltown (3.4%) and Smithfield (4.8%).
They highlight the dilemma the ALP has in trying to square representing both working people and the inner urban ‘progressive’ professionals.
John Faulkner recently had (another) go at prescribing a solution when he delivered the Wran lecture.
As Simon Benson observed in the Daily Telegraph:
Faulkner's thesis centres on a belief that the reason Labor's membership has disappeared was not only as a result of the cancerous machine-dominated process of preselections but because they failed to engage on left issues, causing a leakage of future Labor activists to fringe organisations like Get Up…….
If Labor had not been afraid to embrace Left-wing issues before the election, people would not have voted Green.
That is one view. Benson thought the real problem for the ALP was:
….the political dead weight of the trade union movement.
When they represented the bulk of the workforce they had legitimacy in the ALP. At their current 15 per cent - the majority of which are in public sector unions - they have a diminished legitimacy.
Another view.
As Peter Hartcher said in an opinion piece following Faulkner’s speech:
Labor is now in an existential crisis. For the first time, it has a serious political challenger capable of taking seats from its left, as well as the traditional enemy on the right, the Coalition.
If an elector wants to vote for a conservative party, she can vote for a real conservative party, the Liberals. If an elector wants to vote for a progressive party, he can vote for a real progressive party, the Greens.
Why vote for the one in the middle? Only 31 per cent of voters would bother, according to the latest Herald Nielsen poll, and that's about 9 percentage points fewer than Labor needs if it hopes to stand for election as a party capable of governing in its own right.
The worst case scenario is that Labor will face the ‘Canadian conundrum’.
For many years the Canadian Liberals acted as the dominant ‘brokerage’ party, with long periods of government. By monopolising the centre (and centre left) it usually pushed the conservative parties (as constituted from time to time) to the extremes.
However, following a loss of government the Liberals became increasingly trapped between a successful Conservative Party and the New Democrats, a progressive party perhaps best described as what a combination of the ALP left and the Greens would look like.
The Liberals suffered the worst outcome imaginable:
Then came the unexpected surge of the NDP, and Conservative Leader Stephen Harper’s eleventh-hour appeal to Liberal voters with economically conservative leanings, often called blue Liberals. “Let me speak very clearly to traditional Liberal voters: I know many of you do not want NDP policies. That you do not want NDP tax hikes,” Mr. Harper said on Sunday.
The message: Only we can protect your prosperity.
The result is that the Conservatives were able to achieve in 2011 what eluded them in
2008, a coalition of economically conservative-minded voters who cast their ballots based on pocketbook issues rather than concerns over cultural issues, including the Tories’ supposed leanings toward social conservatism.
Those blue Liberals were the missing element in the Conservative coalition.
In the 1990s, they were the foundation of the successive Liberal sweeps of Ontario. So long as they remained with the Liberals, Mr. Harper would be shut out of the urban heart of most big Canadian cities.
But the rise of the NDP, which siphoned off progressive-minded Liberals,clearly spooked a sizable number of blue Liberals, causing them to bolt to Mr.Harper in the last weekend of campaigning....
This could be the fate of the ALP if Tony Abbott commences to concentrate on values than being the party of 'no and if Labor fails to reform itself.
The question is – can Labor?
The (second most) most recent Labor appointment to the NSW Legislative Council was Walt Secord.
As the Sun Herald reports:
After he left Carr's office, Hawker gave Secord work at his Labor-aligned lobbyist firm Hawker Britton before parachuting him into Rudd's office in Canberra 12 months before the Kevin07 campaign. Straight after the historic win for Labor, Secord was moved (some say shafted) to the office of Justine Elliot, the then minister for ageing, before returning to Sydney in 2009 to work briefly for treasurer Eric Roozendaal and then Keneally.
Keneally describes Secord as ''among Australia's best'' political and media operators but also ''policy smart''
and:
Liberals are happy to see Secord in the upper house where he will be joined by the former primary industries minister Steve Whan, who lost his seat of Monaro but will be parachuted into the Legislative Council to raise the ALP's leadership stocks.
“Having Walt Secord and Steve Whan taking up seats is just more proof that Labor talks about renewal but still hasn't acted upon the talk,'' says the Liberal source.
Quite.
UPDATE
Antony Green has conducted an analysis on the NSW election which includes observations such as:
- the Coalition's 2-party preferred vote was 75.7% in country NSW, 62.0% in Sydney and even 53.9% in the industrial seats of the Hunter and Illawarra;
- in the Hunter Valley, Labor's primary vote was 32.9%, against 33.1% for the Liberal Party and 2.1% for the Nationals;
- the Liberal Party polled 50.6% of the first preference vote in greater a Sydney as opposed to 28.3% for Labor;.
- the Liberal Party even won a majority of the vote in Western Sydney, a first preference vote of 43.5% to 36.6% for Labor, a Liberal 2-party vote of 53.8%; and
- the Labor first preference vote was in single figures in seven electorates.
Truly a terrible result.
11 June 2011
The NSW Election and the ALP
This article was originally published at On Line Opinion on 31 March 2011.
A follow up article will discuss developments since the NSW election.
The NSW ALP has just received its anticipated thumping at the polls, creating a real Quo Vadis moment for both it and the ALP more generally.
This may well have been a ‘transformational election’ – where tribal voters irrevocably change allegiance.
The NSW ALP gamebook (copied in other states) was set out by Bruce Hawker from Hawker Britton in a Sydney Morning Herald article of 14 September 2006:
She went on to say:
For the sake of her party, this restatement of the ALP as the brokerage party of Australian politics had best resonate with sufficient numbers of electors.
Otherwise, it will face a slow descent into irrelevance, stuck between two world views based more on lifestyle than anything else, better reflecting the binary political divide of this century’s Australia than the labour/capital divide of the last.
A follow up article will discuss developments since the NSW election.
The NSW ALP has just received its anticipated thumping at the polls, creating a real Quo Vadis moment for both it and the ALP more generally.
This may well have been a ‘transformational election’ – where tribal voters irrevocably change allegiance.
The NSW ALP gamebook (copied in other states) was set out by Bruce Hawker from Hawker Britton in a Sydney Morning Herald article of 14 September 2006:
When state Labor governments began being re-elected from 1995, the public gave them qualified endorsement. In almost every instance they were elected with the bearest of margins and had to prove they were solid, conservative managers of the economy. When they did move it was usually to the centre on their traditionally weak areas, such as law and order and encouraging development. Premiers such as Bob Carr and Mike Rann were also able to woo the green vote with environmental measures the conservatives could never match, saddled as they are to the Nationals. This political dexterity effectively gave Labor's opponents nowhere to move. The result has been a long run of election wins, each one as good or better than the last. However, this clever positioning in the middle that has worked for the last 15 years has now run its race.
Demographer Bernard Salt has noted a social and economic division between those who live in the inner city and those who live on the city's edge:
…... I am suggesting that there is almost a regionalisation of wealth, income and culture based on urban geography.Battlers, migrants and assorted low-income earners who formerly lived in the inner city are now being flung out, as if by some centrifugal force, to the city's edge. What is left in the inner city is an odd coalescence of tribes - namely students, singles, couples, dinks, gays, expats, corporates, divorcees and, most important of all, the professional and entrepreneurial classes. And to this lot I might add the entertainment, information and media glitterati. As a general principle, none of this class would ever think of living more than 10km from the city centre.
The ALP voting coalition has hitherto consisted of self identifying members of the working class, people with English as a second language, income transfer recipients, public sector workers, the arts sector and progressive middle class professionals who are both secularist and internationalist in orientation.
However, the Greens message - guided by the so-called ‘four pillars’ (ecological sustainability, social equality and economic justice, grassroots democracy and peace and disarmament and nonviolence,) is apparently more amenable to a ‘progressive’ middle class constituency than one put out by a 50% union controlled cadre party designed to represent the ‘labour movement’, achieving progressive change primarily through improvements to working conditions and changes to the wages and salaries system.
Although the Greens failed to make their anticipated breakthrough win in the lower house they are the second most popular party in a number of Sydney electorates, they still won 10% of the vote and the clustered nature of its vote certainly requires the ALP to use a lot of ammunition in seats such as Marrickville and Balmain so Labor can remain competitive in these seats.
On the other side of the coin, the ‘lifestyle’ values of these voters, such as placing a premium on environmental issues, may not be necessarily shared by those in the outer suburbs and industrial regions more interested in more utilitarian issues that are part of living in suburbia – being able to run the car, keep the mortgage paid, and so forth.
The party of organised labour also faces the problem that the larger manufacturing operations employing thousands of unionised workers are being replaced by smaller less unionised service industries, breaking the nexus between worker and union and thus the broader ‘labour movement’.
Finally, in the land of the Macmansion and the self-employed tradie, ‘working class’ identity is being replaced by ‘aspirational’ ideals, creating an environment in which the centre-right message of financial prudence, self-help and independence is receptive.
And so it showed in Newcastle seats such as Charlestown (24.8% swing) and Campbelltown (20.5% swing) amongst others.
The Hunter and the Illawarra no longer have the industrial bases of times of yore, making it more receptive to the safe conservatism of Barry O’Farrell whilst the inner city is turning Green.
The glue that bound the ‘labour movement’ – a wish to express solidarity with the working class – has lost its power to bind, as ‘progressive’ voters become more interested in more abstract concerns such as ‘social justice’ and the erstwhile members of the working class no longer feel…..well…..working class.
This massive rejection of 26 March means the question of ‘what does Labor mean in the 21st century mean?’ will broadly resonate, with possible federal ramifications.
The Prime Minister attempted to set a new middle ground on which to establish the ALP In her Don Dunstan Foundation speech of 16 March 2011.
In the immediate context of arguing why its carbon reduction policies are important, she framed Labor as being between the coalition and the greens:
Neither of the extremes in Australian politics can deliver this reform (carbon reduction). The Coalition has surrendered itself to fear-mongering and denying the power of markets.The Greens are not a party of government and have no tradition of striking the balance required to deliver major reform.
She went on to say:
Like the economic transformation of the 1980s, this is a reform that can only be handled in the progressive Labor tradition…… In all of this, we draw strength from enduring Labor values - protecting jobs – always our first commitment; a sustainable environment for future generations – an environment with less carbon pollution; reform with equity, looking after those who need a helping hand; and accepting a scientific world - view in a community of reason.
For the sake of her party, this restatement of the ALP as the brokerage party of Australian politics had best resonate with sufficient numbers of electors.
Otherwise, it will face a slow descent into irrelevance, stuck between two world views based more on lifestyle than anything else, better reflecting the binary political divide of this century’s Australia than the labour/capital divide of the last.
08 March 2011
The Mugging of Bruce Baird (and the Carbon Tax) Shows Why a Tax Summit is Needed Now
It is a shame that political reality has forced NSW Shadow Treasurer Mike Baird stop thinking about imposing a profits based tax on mining, rather than the current royalties system of taxing an amount for each tonne of mineral extracted.
It probably is a more efficient way to bring mining to taxation.
We hope Baird isn't forced to drop the other parts of his observations made to The Australian:
It probably is a more efficient way to bring mining to taxation.
We hope Baird isn't forced to drop the other parts of his observations made to The Australian:
A NSW Coalition government would push for radical reform of federal-state relations at the looming tax summit by demanding the states directly receive a greater share of overall taxes. NSW opposition Treasury spokesman Mike Baird said that, if elected on March 26, he would use the federal government's promised summit to address the imbalance in state and federal taxation powers and spending needs.
States were responsible for 40 per cent of service delivery, but raised only 16 per cent of taxes, he said, adding that NSW would operate more efficiently if it had greater responsibility for raising revenue.
We have previously noted the recommendations contained in the Henry Review, and, like Baird hopes that the proposed summit will determine:
1. which level of government should have responsibility for particular public policy areas;
2. what taxation bases should be assigned to the states and territories; and
3. where it is appropriate for the Commonwealth to be the level of government determining policy outcomes but is an area where it has no clear constitutional capacity to act, whether it is appropriate to confer Commonwealth power either:
(a) indirectly, through an agreement made under section 96 of the Constitution; or
(b) through a reference of power by the states to the Commonwealth or directly by constitutional amendment.
The importance of getting the taxation mix right is now more important than ever should the the God Knows What It Will Look Like Carbon Tax ever get up, discussed in our previous post.
Efficient public administration deserves nothing less.
03 March 2011
Of disability, carbon and terrorism - new entitlements for a new century
Three interesting things happened this week.
The Productivity Commission draft report on disability care and support, proposing a number of new assistance programmes, was released.
It proposed a National Disability Insurance Scheme (NDIS) to provide disability-related services and supports to the community at large, with a particular emphasis on funded support for people with significant disabilities and their carers.
People with a ‘permanent disability’ will receive ‘reasonable and necessary’ support free of any income or assets test, determined on the basis of satisfying criteria contained in ‘assessment tools’ which are ‘relatively easy to administer and exhibit low susceptibility to gaming’.
It also proposed a National Injury Insurance Scheme (NIIS). Building from existing schemes, it is to provide lifetime care and support to those suffering catastrophic injuries from accidents, such as quadriplegia, acquired brain injuries, severe burns and multiple amputations, administered under consistent ‘state-based, no-fault arrangements.’
The report notably suggested ‘common law rights to sue for long-term care and support should be removed’.
The House of Representatives debated Tony Abbott’s private members bill creating an entitlement for people (or families of people) injured or killed overseas as a result of ‘terrorist acts’ under a Assisting Australian Victims of Overseas Terrorist Scheme Framework operating under guidelines prepared by the Attorney-General.
Finally, the carbon tax, was imposed on all carbon emitting sectors except (apparently) agriculture and (depending on the time of day) those using petrol, with ‘every cent raised’ to (amongst other things) ‘ assist families with household bills’ was (again) proposed by the Prime Minister.
Each proposal incorporates the payment of new entitlements to particular classes of people satisfying particular criteria.
And they are all dear.
Abbott is silent as to where the money for his proposed entitlement comes from – undoubtedly consolidated revenue.
The Productivity Commission proposes NDIS be funded by direct payments from consolidated revenue, with an alternative option being a levy on personal income (a national disability insurance premium) to be imposed so as to allow the scheme to operate.
The NIIS is to be funded from third party insurance premiums and state based property taxes.
The carbon tax of course, pays for allowances to families to compensate the effect of…well….the carbon tax.
This is odd.
One reason to bring something to tax is to encourage change in behaviour.
In this case, you would have thought the intention of the carbon tax is to get across to the ordinary family the idea that ‘turn on the air conditioner and you will receive a painful smack in the hip pocket. Don’t do it!’
Compensating for the increased cost of electricity arising from the imposition of a tax from its proceeds is….a little circular, really.
There are other concerns with these proposals.
The first is, as many small businesses who geared up to provide to supply pink batts and solar panels for now reduced or removed government programmes (and those people who have, or intended, to change behaviour on the basis of the programmes) know, what the Lord giveth, the Lord can taketh away.
People can, in good faith, organise their affairs on the basis of the conditions of programmes or ‘relatively easy to administer assessment tools’ and find that all of a sudden the rules have changed, with great personal cost.
The second is the increase of the role of government.
For example, when the Prime Minister announced the carbon tax, the Sydney Morning Herald reported that:
The final concern is the possibility that a culture of dependency can be developed.
An example is the proposed entitlement right to be created if someone is identified as being ‘disabled’ under the proposed NDIS.
There is no particular argument about the appropriateness of providing government support to those with catastrophic illnesses or injuries.
Moreover, there is substance to the proposal of creating an entitlement right on the basis of an objective level of disability rather than the current multiple pathways to, and different levels of, entitlement depending on circumstance.
However, if the threshold level of eligibility is cast too low, there can be circumstances where a person could become eligible to receive a benefit because something objectively identified as a disability is simply part of getting old – a reasonably foreseeable circumstance that an individual could plan for.
The mere knowledge that there is a ‘right’ that will accrue in due course can mean that many will simply not prudently plan for the future, ensuring that future generations will have to ensure that this scheme (and all the others, like Abbott’s proposal and compensation to ensure families are not impacted on carbon taxes etc) are fully funded or face the electoral fury of the entitlement class and its supporters.
Tax levels will need to reflect this.
Finally, as we have previously discussed, the quality of the services provided will vary depending on the competing pressures on the budget at any given time.
Many will simply be stuck with whatever the government dishes up…….which may not be much at all.
The increasing temperature of the debate in Canberra illustrates that people are slowly becoming aware that this Parliament could really make decisions that influencing the structure of Australian society in the 21st century.
Better buckle up for the ride.
The Productivity Commission draft report on disability care and support, proposing a number of new assistance programmes, was released.
It proposed a National Disability Insurance Scheme (NDIS) to provide disability-related services and supports to the community at large, with a particular emphasis on funded support for people with significant disabilities and their carers.
People with a ‘permanent disability’ will receive ‘reasonable and necessary’ support free of any income or assets test, determined on the basis of satisfying criteria contained in ‘assessment tools’ which are ‘relatively easy to administer and exhibit low susceptibility to gaming’.
It also proposed a National Injury Insurance Scheme (NIIS). Building from existing schemes, it is to provide lifetime care and support to those suffering catastrophic injuries from accidents, such as quadriplegia, acquired brain injuries, severe burns and multiple amputations, administered under consistent ‘state-based, no-fault arrangements.’
The report notably suggested ‘common law rights to sue for long-term care and support should be removed’.
The House of Representatives debated Tony Abbott’s private members bill creating an entitlement for people (or families of people) injured or killed overseas as a result of ‘terrorist acts’ under a Assisting Australian Victims of Overseas Terrorist Scheme Framework operating under guidelines prepared by the Attorney-General.
Finally, the carbon tax, was imposed on all carbon emitting sectors except (apparently) agriculture and (depending on the time of day) those using petrol, with ‘every cent raised’ to (amongst other things) ‘ assist families with household bills’ was (again) proposed by the Prime Minister.
Each proposal incorporates the payment of new entitlements to particular classes of people satisfying particular criteria.
And they are all dear.
Abbott is silent as to where the money for his proposed entitlement comes from – undoubtedly consolidated revenue.
The Productivity Commission proposes NDIS be funded by direct payments from consolidated revenue, with an alternative option being a levy on personal income (a national disability insurance premium) to be imposed so as to allow the scheme to operate.
The NIIS is to be funded from third party insurance premiums and state based property taxes.
The carbon tax of course, pays for allowances to families to compensate the effect of…well….the carbon tax.
This is odd.
One reason to bring something to tax is to encourage change in behaviour.
In this case, you would have thought the intention of the carbon tax is to get across to the ordinary family the idea that ‘turn on the air conditioner and you will receive a painful smack in the hip pocket. Don’t do it!’
Compensating for the increased cost of electricity arising from the imposition of a tax from its proceeds is….a little circular, really.
There are other concerns with these proposals.
The first is, as many small businesses who geared up to provide to supply pink batts and solar panels for now reduced or removed government programmes (and those people who have, or intended, to change behaviour on the basis of the programmes) know, what the Lord giveth, the Lord can taketh away.
People can, in good faith, organise their affairs on the basis of the conditions of programmes or ‘relatively easy to administer assessment tools’ and find that all of a sudden the rules have changed, with great personal cost.
The second is the increase of the role of government.
For example, when the Prime Minister announced the carbon tax, the Sydney Morning Herald reported that:
Together with the Climate Institute, (Independent MP Tony) Windsor says more than 30,000 jobs are waiting to be created in the transition to environmentallyHowever, the report went on to say:
friendly electricity generation.
The institute’s chief executive officer John Conor said the net figure of 30,000 jobs would be impacted by challenges in the coal-rich Hunter Valley and Victoria's La Trobe.You have to hope that the outcomes to be achieved by imposing the carbon tax are so whizzer that it’s worth having the lives of Hunter and La Trobe valley residents turned upside down – and that the residents of those areas will enjoy having changes to lifestyles ‘managed’.
"If you manage this problem you can grow opportunities," Mr Conor said.
The final concern is the possibility that a culture of dependency can be developed.
An example is the proposed entitlement right to be created if someone is identified as being ‘disabled’ under the proposed NDIS.
There is no particular argument about the appropriateness of providing government support to those with catastrophic illnesses or injuries.
Moreover, there is substance to the proposal of creating an entitlement right on the basis of an objective level of disability rather than the current multiple pathways to, and different levels of, entitlement depending on circumstance.
However, if the threshold level of eligibility is cast too low, there can be circumstances where a person could become eligible to receive a benefit because something objectively identified as a disability is simply part of getting old – a reasonably foreseeable circumstance that an individual could plan for.
The mere knowledge that there is a ‘right’ that will accrue in due course can mean that many will simply not prudently plan for the future, ensuring that future generations will have to ensure that this scheme (and all the others, like Abbott’s proposal and compensation to ensure families are not impacted on carbon taxes etc) are fully funded or face the electoral fury of the entitlement class and its supporters.
Tax levels will need to reflect this.
Finally, as we have previously discussed, the quality of the services provided will vary depending on the competing pressures on the budget at any given time.
Many will simply be stuck with whatever the government dishes up…….which may not be much at all.
The increasing temperature of the debate in Canberra illustrates that people are slowly becoming aware that this Parliament could really make decisions that influencing the structure of Australian society in the 21st century.
Better buckle up for the ride.
19 February 2011
Forget What We Said Earlier: COAG, Still the Fourth Tier of Government
We have previously noted that some people such as WA Premier Colin Barnett have suggested that COAG is becoming another tier of government.
The content of the COAG communiqué of 13 February 2011 suggests the tendency is continuing.
The main event was the signing of the Heads of Agreement on National Health Reform
However, other matters were dealt with.
A National Vocational Education and Training Regulator is to be established to ‘drive better quality standards and regulation across the Australian VET sector'.
This new body will join the Australian Health Practitioners Regulatory Agency, the National Occupational Licensing Authority and the Australian Curriculum Assessment and Reporting Authority as brand new national bodies to drive and determine a single set of national standards.
Another decision was to speed up the Seamless National Economy from June 2013 to December 2012, with options to be developed for a further wave of regulatory and competition reforms.
This will undoubtedly lead to the development of more national regulation.
However, the most interesting development was the establishment of Standing Councils to operate under COAG, designed to:
The idea is to:
However, this classic ‘executive federalism’ model of governance suffers from one significant deficiency – ‘democratic deficit’.
The somewhat murky structure of the proposed new ministerial council process makes it difficult to see how anyone interested in a policy matter (other than larger players with the capacity to maintain a Canberra presence) will have the capacity to adequately participate in the regulation development process.
More particularly, once a COAG Council has ‘undertaken a legislative function’ (which presumably means approving a draft national law to be passed by (usually) state parliaments) one fears the opportunity to amend what could be a bad law will be limited because as COAG (or, in this case, a National Council of COAG) said a law has to pass, and so it will.
We harbour sincere doubts that this manner of rule making will necessarily lead to better laws.
However, one thing illustrated by the COAG communiqué is that even though Council membership may no longer be wall to wall Labor, the introduction of non-Labor members has not changed the function of COAG as another tier of government determining the rules of the Australian federation without any parliamentary oversight.
Plus ca change, plus c'est la meme chose.
The content of the COAG communiqué of 13 February 2011 suggests the tendency is continuing.
The main event was the signing of the Heads of Agreement on National Health Reform
However, other matters were dealt with.
A National Vocational Education and Training Regulator is to be established to ‘drive better quality standards and regulation across the Australian VET sector'.
This new body will join the Australian Health Practitioners Regulatory Agency, the National Occupational Licensing Authority and the Australian Curriculum Assessment and Reporting Authority as brand new national bodies to drive and determine a single set of national standards.
Another decision was to speed up the Seamless National Economy from June 2013 to December 2012, with options to be developed for a further wave of regulatory and competition reforms.
This will undoubtedly lead to the development of more national regulation.
However, the most interesting development was the establishment of Standing Councils to operate under COAG, designed to:
undertake legislative and governance functions relevant to their scope, and provide an annual report to COAG which includes an overview of the decisions made by the Council. (our emphasis)
The idea is to:
….(provide) a clear role for Ministers from all jurisdictions to support COAG in tackling 21st century policy challenges. There will be sustained collaborative effort on the long-term reform agenda while allowing for the flexibility needed to address more urgent challenges.
However, this classic ‘executive federalism’ model of governance suffers from one significant deficiency – ‘democratic deficit’.
The somewhat murky structure of the proposed new ministerial council process makes it difficult to see how anyone interested in a policy matter (other than larger players with the capacity to maintain a Canberra presence) will have the capacity to adequately participate in the regulation development process.
More particularly, once a COAG Council has ‘undertaken a legislative function’ (which presumably means approving a draft national law to be passed by (usually) state parliaments) one fears the opportunity to amend what could be a bad law will be limited because as COAG (or, in this case, a National Council of COAG) said a law has to pass, and so it will.
We harbour sincere doubts that this manner of rule making will necessarily lead to better laws.
However, one thing illustrated by the COAG communiqué is that even though Council membership may no longer be wall to wall Labor, the introduction of non-Labor members has not changed the function of COAG as another tier of government determining the rules of the Australian federation without any parliamentary oversight.
Plus ca change, plus c'est la meme chose.
03 February 2011
2011 - The Year Ahead
The 2011 political year is now beginning. Here are some of the issues that will influence how it pans out.
The upcoming NSW Drubbing
It will not be an issue of whether NSW Labor will lose government on 26 March.
Rather, given that that the ALP primary vote is as low as 24% the question will be by how far.
The Hunter and the Illawarra no longer have the industrial bases of times of yore, making it more receptive to the very small ‘c’ conservatism of the Coalition, whilst the inner city is turning Green.
The glue that bound the labour movement – a wish to express solidarity with the working class – has lost its power to bind.
This reality, together with the poor condition of ‘brand Labor’ means that this could be a ‘transformational election’ – where tribal voters irrevocably change allegiance.
This could have federal ramifications as the NSW model has been the model of governance has been the template for Federal Labor.
Massively reject NSW Labor, the question of ‘what does Labor mean in the 21st century mean?’ will more broadly resonate.
Then there is the next challenge:
The Greens
The new Senate is sworn in on 1 July. From that date the dynamics of the chamber changes. All it needs is for the Government and Greens to vote together to enable matters to pass.
How will Labor handle this? Will it be like Tasmania or the ACT in which the parties act more like a coalition presenting to the chamber pre-agreed outcomes, or will there be an attempt of product differentiation between them?
Following the Queensland floods, the Prime Minister has announced the abolition, deferral or capping of a number of carbon abatement schemes, including the Green Car Innovation Fund, Cleaner Car Rebate Scheme, the Carbon Capture and Storage Flagships and Solar Flagships, the Solar Hot Water Rebate, Green Start Program, Solar Homes and Communities Plan and the Global Carbon Capture and Storage Institute – policy outcomes that will clearly rile the Greens.
However, at the same time she proposes retaining a price on carbon, something to the Prime Minister apparently akin to the floating of the dollar (as she told the National Press Club) or a driver of ‘another technological revolution like Information Technology did in the 1980s and 90s’ (as she told a recent CEDA luncheon).
Two lessons flowed from the Victorian election.
The first was that in deciding not to provide the Greens any preferences, the Victorian Libs proved that you can take on the Greens without being seen as anti-environmentalist and suffer an electoral backlash.
The second lesson was that suburbia is feeling the pinch of high utility prices.
This will be an increasing factor to take into account when ‘putting a price on carbon’ is ultimately unambiguously translated as being ‘increasing electricity costs’ as the carbon debate comes to a climax during 2011.
The Government’s attempts to balance its environmental credentials will be interesting.
Then there is:
Dealing with the States
We have commented before about the need for the Government to fund the social democratic project.
And so the Commonwealth is seeking to claw back some GST payments to the states to pay for hospital reform, whilst the current minerals resource rent tax will be used to (ultimately) increase superannuation payments to employees and ‘build essential infrastructure’.
The Commonwealth also wants to impose ‘pre-commitment’ technology on poker machines, in an endeavour to reduce problem gambing – and to give effect to a major policy concern of Andrew Wilkie, one of those on whom the Government is relying to maintain government.
However, the states are most unhappy.
Queensland’s Anna Bligh was reported as saying that ‘we are very clear here in Queensland that constitutionally as a sovereign state in our own right, we reserve the right to set appropriate royalties which are returned to Queenslanders for the minerals that are taken out of our state’.
The Victorian Coalition government's Resources Minister, Michael O'Brien, said he would not allow his state's taxpayers to "fill the federal Labor government's budget black hole", insisting royalties had always been a state right.
Finally, WA Premier Colin Barnett said his state would not hand over GST revenues.
Then there is the gambling issue, with some states concerned of (amongst other things) impact on gambling revenues – one of the few own source revenue streams left to the states,
Given that it appears the ‘tax summit’ to discuss the proposals contained in the Henry review is intended to be not much more than a talkfest, COAG will be a forum where the issue of dealing with vertical fiscal imbalance and the role of the states in the 21st century Australia will be a major issue – particularly as there are two (and very shortly, probably three) states with non-Labor governments this year.
This is before dealing with policy changes necessary to bring the budget back to surplus by 2013.
2011 will be one of the more interesting political years.
The upcoming NSW Drubbing
It will not be an issue of whether NSW Labor will lose government on 26 March.
Rather, given that that the ALP primary vote is as low as 24% the question will be by how far.
The Hunter and the Illawarra no longer have the industrial bases of times of yore, making it more receptive to the very small ‘c’ conservatism of the Coalition, whilst the inner city is turning Green.
The glue that bound the labour movement – a wish to express solidarity with the working class – has lost its power to bind.
This reality, together with the poor condition of ‘brand Labor’ means that this could be a ‘transformational election’ – where tribal voters irrevocably change allegiance.
This could have federal ramifications as the NSW model has been the model of governance has been the template for Federal Labor.
Massively reject NSW Labor, the question of ‘what does Labor mean in the 21st century mean?’ will more broadly resonate.
Then there is the next challenge:
The Greens
The new Senate is sworn in on 1 July. From that date the dynamics of the chamber changes. All it needs is for the Government and Greens to vote together to enable matters to pass.
How will Labor handle this? Will it be like Tasmania or the ACT in which the parties act more like a coalition presenting to the chamber pre-agreed outcomes, or will there be an attempt of product differentiation between them?
Following the Queensland floods, the Prime Minister has announced the abolition, deferral or capping of a number of carbon abatement schemes, including the Green Car Innovation Fund, Cleaner Car Rebate Scheme, the Carbon Capture and Storage Flagships and Solar Flagships, the Solar Hot Water Rebate, Green Start Program, Solar Homes and Communities Plan and the Global Carbon Capture and Storage Institute – policy outcomes that will clearly rile the Greens.
However, at the same time she proposes retaining a price on carbon, something to the Prime Minister apparently akin to the floating of the dollar (as she told the National Press Club) or a driver of ‘another technological revolution like Information Technology did in the 1980s and 90s’ (as she told a recent CEDA luncheon).
Two lessons flowed from the Victorian election.
The first was that in deciding not to provide the Greens any preferences, the Victorian Libs proved that you can take on the Greens without being seen as anti-environmentalist and suffer an electoral backlash.
The second lesson was that suburbia is feeling the pinch of high utility prices.
This will be an increasing factor to take into account when ‘putting a price on carbon’ is ultimately unambiguously translated as being ‘increasing electricity costs’ as the carbon debate comes to a climax during 2011.
The Government’s attempts to balance its environmental credentials will be interesting.
Then there is:
Dealing with the States
We have commented before about the need for the Government to fund the social democratic project.
And so the Commonwealth is seeking to claw back some GST payments to the states to pay for hospital reform, whilst the current minerals resource rent tax will be used to (ultimately) increase superannuation payments to employees and ‘build essential infrastructure’.
The Commonwealth also wants to impose ‘pre-commitment’ technology on poker machines, in an endeavour to reduce problem gambing – and to give effect to a major policy concern of Andrew Wilkie, one of those on whom the Government is relying to maintain government.
However, the states are most unhappy.
Queensland’s Anna Bligh was reported as saying that ‘we are very clear here in Queensland that constitutionally as a sovereign state in our own right, we reserve the right to set appropriate royalties which are returned to Queenslanders for the minerals that are taken out of our state’.
The Victorian Coalition government's Resources Minister, Michael O'Brien, said he would not allow his state's taxpayers to "fill the federal Labor government's budget black hole", insisting royalties had always been a state right.
Finally, WA Premier Colin Barnett said his state would not hand over GST revenues.
Then there is the gambling issue, with some states concerned of (amongst other things) impact on gambling revenues – one of the few own source revenue streams left to the states,
Given that it appears the ‘tax summit’ to discuss the proposals contained in the Henry review is intended to be not much more than a talkfest, COAG will be a forum where the issue of dealing with vertical fiscal imbalance and the role of the states in the 21st century Australia will be a major issue – particularly as there are two (and very shortly, probably three) states with non-Labor governments this year.
This is before dealing with policy changes necessary to bring the budget back to surplus by 2013.
2011 will be one of the more interesting political years.
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