The views in this paper do not necessarily reflect those of the Parliamentary Research Service or the Department of the Parliamentary Library


The Parliamentary Library




This paper prepared by:    LAW AND GOVERNMENT GROUP Lea Armstrong (06)    277 2432

Date:    2 November 1990  




Any proposal to abolish the States altogether or replace them with some other structure is difficult to achieve; section 128 of the Commonwealth Constitution requires that any such proposal be approved by majorities in each of the six States, This represents a formidable hurdle to changing our present Federal structure *

1.    Inadequacies of Australian Federalism

Over the past 70 years the States have ceased to be the strong political entities which existed in 1901, the year Australia became a federal nation.

The Constitution, the document which was drawn up to govern this federal arrangement, was a product of a series of conventions conducted by a group of semi-independent British colonies which now comprise the Australian States. As Cullen points out, there is little doubt that, for many of the framers of the Constitution, the new structure was to be State-driven; that is, the former colonies, now States, saw themselves as the masters in the new order and the new Commonwealth Government somewhat as their servant. Yet the years since Federation have seen a dramatic decline in the power of States, to the extent that modern day States have been labelled hollow political entities .1 The document which set out the original power alignment of the States and Commonwealth has barely altered since 1901, yet there has been a major shift in the alignment of the Commonwealth and the States. The Federal Government has extended its reach into virtually every area of governmental activity.

1 Cullen, Classic federalism: Australia s political albatross , Law Institute Journal, August 1990, p. 728,



Reasons put forward for the decreased significance of the States in late twentieth century Australia include increased intergovernmental co-operation (eg. our current uniform companies legislation is a produce of intergovernmental co-operation); the Commonwealth s near-total control of income and sales taxation C which has been used to control areas normally beyond Federal legislative power by use of tied grants (eg. tertiary. education); and decisions of the High Court of Australia which have enabled a huge growth in Federal power.2 The Court has significantly enhanced taxation powers, corporation power, trade and commerce    power and external affairs power of the Commonwealth. As one present High Court judge has commented, the Court has altered the nature of the Federation, as conceived in the late nineteenth century, in a manner which one suspects would have proved unacceptable if put to referendum.3

Nevertheless, the suitability of the present federal structure has been a central theme in constitutional and political debate throughout this century. The Constitution remains a document fundamentally flawed because of its arbitrary and outmoded division of governmental responsibilities relevant in 1901, but no longer relevant in 1990. The shift in Commonwealth-State relations since Federation makes the abolition of the States a logical conclusion.

                  2 Ibid., p. 729.

3 Sir Daryl Dawson, The Constitution - Major Overhaul or Simple

Tune-up Southey Memorial Lecture 1983, reproduced in Melbourne University Law Review, vol. 14, June 1984, p. 353.



2.    The Case Against Australian Federalism

Various arguments have been formulated over the years, in response to the nature and practical realities of our Federal system. The arguments reproduced below are taken from J. McMillan, G.Evans, H.Storey, Australia s Constitution: Time For Change

(a)    Federalism has outlived its usefulness

A common argument is that federalism is a second-best system , appropriate only as a transitional form of government devised for former colonial territories or for societies marked by great divisions. While the historical inevitability of federalism in Australia is conceded, it is said to be irrelevant and impractical now. Australia is a highly homogeneous society and most State laws are substantially similar to those of other States, with comparable range of services. With the creation of a national society, whatever justification did exist for separate and different school systems, traffic laws, courts, employment conditions and the like has disappeared.

Another argument is that the role of government has changed dramatically. In 1900 it was expected to be small and unobtrusive in 1990, however, it is expected to manage the economy and the country in response to pressures that are largely national and international in dimension. On that criterion it is claimed that our federal Constitution, by dispersing power in seven directions, inhibits our national capacity for strong, intelligent and effective government.5

McMillan, Evans, and Storey, Australia s Constitution: Time For Change , 1983, pp. 140 141.



(b)    Federalism means over-government

It is argued that Australia, with a population of 18 million, does not need 15 houses of parliament. That is said to be an arrangement that is extravagant and encourages conflicts that have more to do with persevering the power of political leaders than with resolving national problems. There is said to be no reason to assume, moreover, that the political system will be less democratic or responsive if there was only central government.6

As for the theme of democracy, it is even said that State governments in general have a worse record than the Commonwealth in respecting democratic principles and protected the rights of the minorities. As to the theme of responsiveness, it is claimed first that centralised government need not entail centralized administration; and secondly, that Commonwealth politicians are in fact already more responsive to public opinion, simply because they and the policies they espouse are better known to the people and are more likely to evoke strong feelings of approval or disapproval.

(c)    Federalism is inefficient

It is argued that the division of powers may result in the different governments having restricted views when it comes to policy, with no compulsion to look to the overall interests of the nation.

                 6 Id.U

                7 Ibid., p. 142



However, the most conspicuous legacy of arbitrary division of State/Federal powers is the duplication and overlap of laws and civil servants eg. idiosyncratic interstate differences on matters like railway gauges and traffic rules, and overlapping State and Commonwealth jurisdictions on areas of policy.8

(d) Federalism means legalism

In a unitary system the parliament is free, by and large, to enact whatever laws it chooses. This is not so in a federal system, where the judiciary has a predominant role to the extent 3 that it may place a veto on parliamentary legislation. This has been objected to as undemocratic. Judges may place severe restrictions on the political programmes of elected governments.9

3.    Suggestions for reform

Two of the most frequently canvassed suggestions in debates on federalism involve the conversion of the Australian federal system into a unitary one, or the development of a two-tier system where regional or local governments have constitutionally guaranteed powers.

These suggestions both involve a consideration of the rationale for the existence of local government authorities. Local government has been identified as having three major strengths:

it can provide responses to problems in diverse locations; it can respond rapidly and efficiently to specific problems; it can utilise local knowledge and communication networks to resolve problems. There is a notion that local government is somehow closer to the people, providing opportunities for participation and resulting in a more true representative and responsive institution.10

                  8 Id.

                  9 Ibid., p. 143.*



A paper issued by the Queensland Electoral and Administrative Review Commission on issues in local government, states that, in making choices regarding the combinations of functions and services to be provided to the community, local government can incorporate the values of participation, accountability and democratic representation; and can ensure a supply of services that responds to local community needs. The Whitlam Government s Australian Assistance Plan scheme of the early l970s involved increased involvement of local communities in some governmental functions. The rhetoric of the scheme was about responsiveness and participation, dispersal of bureaucratic power and more permeable government structures.

(a) Unitary system

In a unitary system there is one central Parliament with supreme legislative power. In Australian terms, this would mean the abolition of the States as we know them. It is compatible, however, with unitary government to have local (or State) assemblies with effective law-making powers. In countries such as the UK and NZ local government is based on the concept of dual polity . This idea refers to the separation of central and it    local government.12 The essential feature is that any local legislatures are constitutionally subordinate bodies, exercising powers delegated by the central legislature.

10 R.J.K. Chapman and M. Wood, Australian Local Government: The Federal Dimension, 1984, p. 10.

11 Local Authorities External Boundaries Review, October 1990. p.21.

12 E.C. Page and N.J. Goldsmith (eds), Central and Local Government Relations: A Comparative Analysis of. West European Unitary States, 1987, p. 58.



From 1918 to 1971 the ALP was committed to introducing what was generally regarded as a unitary system, even though the States were to be retained: they were to be reduced to the lower status of exercising powers delegated by the Coimnonwealth. 3

(b)    Development, of a new regional or local government system

Regionalism is a term, which has been used to describe Australian experiments with decentralization 4, rather than a term used in connection with the creation of alternative political forces at the regional level!

Chapman and Wood in their book Australian Local Government: The Federal Dimension, remind the reader that the countryside in Australia in nineteenth century was a mosaic of unrelated parts . Colonial boundaries between the states were drawn up in London on grounds, which had little to do with small urban communities that had grown up around the ports or with a larger culturally homogeneous territory. In short, there is nothing ~ natural about the way Australia is divided into states, and there is no reason to assume that the State borders will represent forever the most rational arrangement for Australia s political organization.15

In any creation of a two-tier political structure, a system whereby governmental powers are formally distributed between national and regional local governments would be, arguably, a natural recognition of the fact that in this country there is often more differentiation within states than between them. It would also encompass any creation of a two-tier political structure, a system whereby governmental powers are formally distributed between national and regional local governments would be, arguably, a natural recognition of the fact that in this country there is often more differentiation within states than between them. It would also encompass arguments that local government is more responsive to citizens than a State government in a capital city often far away from citizens. It is also more in line with our political culture than a unitary system where the national government has all embracing powers which it chooses to delegate to local government authorities.

13 McMillan et al., op, cit., p. 138.

14 Chapman and Wood, op. cit., p. 169.

15 p.    169; also see McMillan, Evans and Storey, op. Cit., p. 137.



A formal constitutional document could provide for the existence of local government, and its exercise of certain powers.

           Possible distribution of functions between national and local governments

There are sound arguments that can be advanced to support a complete rationalisation of the existing division of powers, including a greater role for local government. These arguments involve concepts of efficiency and economy and are particularly relevant in times of economic restraint. In a scenario where a strong central government is combined with a local government system having greater powers - than at what functions could/should be given to local or regional governments

(a) Local government

                Local governments can be given responsibility for fulfilling a wide range of state functions and allowed a high degree of discretion in delivering local services. As Page comments, in referring to western European unitary states, local government is responsible for the delivery of a large portion of public services.

While the role of local government authorities varies to a large extent in different parts of Australia, local governments have traditionally supplied physical - services such as garbage collection land use planning, and administration services within their area. As the Constitutional Commission stated in its final report, in 1900, the role of local government lay almost entirely in the supply of services to property,

16 Page and Goldsmith, op, cit., p. 68.



particularly in roads, drainage and the disposal of garbage.17 Over the past few decades, however, there has been a significant growth in the role of local government generally, with increased concentration on the human and social services, town planning, environmental management, recreational and sporting facilities and information services. In any system of increased powers for local governments, these are perhaps the areas upon which focus should be centred.

It is instructive to consider the example of Queensland local government authorities. They generally have broader powers than their counterparts in other states. The main functions able to be performed by these authorities, at present can be categorized into the following groups: community representation; public works and services; recreational facilities; council properties; traffic management; health and welfare; housing land use planning and control; municipal trading; inspection/licensing power to regulate pollution, animals, advertising etc; promotion and development; and civil defence. (See Appendix to the Electoral and Administrative Review Commission Report - attached here as Appendix A)

                In addition, it has been proposed that broad general powers be conferred on local government to:

-    provide for the peace, order and good government of its area;

-    make by-laws for this purpose so long as, they do not interfere with the affairs of) the State Government or in respect of which the State Parliament is not competent to make laws; and exercise such executive powers as would enable the local

                  17 final Report of the Constitutional Commission 1988 vol.1, p. 442.



authority to carry out its real powers, so long as the function proposed be performed is not prescribed by law as being the exclusive function                  of any other public body.18

This proposal would enable local authorities to perform functions not currently able to be exercised by them, and, in-the view of the Qld Electoral and Administrative Review Commission, would facilitate the trend to human service19, an area in which local government authorities are well placed to provide personal care and community services in a sensitive and responsive manner .20

The above list of actual and proposed functions constitutes a good list of functions which local government is capable of performing.

 In addition, there are still more functions which local government is well placed to carry out in an effective manner.

At State level, there are governments clinging to management of, inter alia, health and sub-tertiary education, both of which could arguably better be handled at a more decentralised level.

Concerning education, while the government should have control over curricula (an area for which the States have direct responsibility at present) and some policy issues (currently Commonwealth and State duplication in many areas) in the interests of uniform educational standards, local governments should be capable of administering schools in their district and of formulating policy with an understanding of the local community and its needs in mind.

18 Discussion Paper on the Local Government Act Review, 1989, cited in Local Authorities External Boundaries Review, p. 22.

                 19 Local Authorities External Boundaries Review, p. 21

                 20 Ibid., p. 16.



                Even in federal countries such as the USA, local government bodies are closely involved in education. (attached is a chapter on education under local government authorities in England - see Appendix B)

                With regard to health, local governments are arguably better placed than States to administer hospitals and other health services and institutions currently managed by the States. Health care involves a high level of personal involvement and understanding, and often the best kind of care is provided by smaller, community-based hospitals.

                Furthermore, with respect to welfare, the national government could provide money directly to local government welfare bodies for a wide range of services The AAP, referred to above, was a plan to create a system of participatory social welfare ~ networks, based on regions, in which all citizens could become actively involved._. On the advice of many social service agencies, both government and non-government, who emphasised the importance of planning, developing and administering welfare services on a grass roots basis, the Plan was based on the assumption that the main burden of providing social services should be carried out at the local community level. It rejected the notion that such services can effectively be controlled or administered from a central point, While not continued by the Fraser Liberal Government, the Plan had the potential to be very of the AAP - see Appendix C)

                The national government could also provide money for public housing programmes administered by local government bodies. In the USA and UK, for example, local bodies are closely involved in housing matters. (attached is a chapter on housing under English local government bodies -see Appendix D)



             Concerning employment and training, the Commonwealth and States have many overlapping schemes at present. These schemes could be               rationalised and their administration, or even policy, could be given to local governments.

             Concerning the police, there could be locally managed forces instead of the current large and unwieldily State police forces. It has been argued              that if police were hired by and reported to local government authorities, there would be more sense of local involvement and perhaps less              police corruption.21

             Funding of local government authorities could be by way of loans and grants from the national government, and/or increased local government              taxation.

(b)    National government function.

            Many of the important Issues facing Australia are increasingly national in scope and character, yet the national government is constrained by lack of constitutional power in many relevant1 areas. Issues that arguably should be dealt with by the national government include economic management (one six state and two territory economies); industrial, relations; educational curriculum; national standards laws; land transport regulations and a national railway system; communications laws especially those relating to the print media; uniform laws dealing with, inter alia, defamation and custody of children.23


Law and Government Group




21 J.Papworth, Non-Local Local Government and Local Power , Ecologist, vol. 18(6) November/December 1988, p. 216.

22 During the period 1972-1975, the federal government granted financial assistance directly to local government authorities by way of specific purpose grants under s. 96 of the Constitution.

    23 See, eg. G. McIntosh, States rights: are they in the national     interest Canberra Times, 7 February 1989.