Australian Federalism: Rescue and Reform
Federalism and Australian Democracy
AJ Brown:
The question why do all of this, you know, what is driving and
what should be driving our federal system and our approach to
reform of the federal system is something that I think Cheryl
Saunders as always is extremely well placed to remind us about
some of the fundamentals of. Cheryl really needs no
introduction. She has got a long bio in the program. Almost all of
you know her and all I can add to that is that she is a fantastic
collaborator in all the work that I have been doing and incredibly
tolerant of some of the weird and wacky twists that some of our
research often takes.
So I won’t go through Cheryl’s bio in any great detail or anything
except to say that I hope that we’re about to continue a
conversation we began in the Sydney Airport lounge where we
first effectively started talking about what really matters in terms
of the fundamentals of the federal system in relation to
Australian democracy.
[Applause]
Cheryl Saunders:
Well thanks AJ. I’m afraid I haven’t always been such a tolerant
collaborator but it is very nice of you to say so. I’m sort of wired
for all sorts of sound here and I’m hoping I don’t explode.
Now can I just begin by thanking AJ for all his energy in making
this happen. It took us all a lot of energy to get to Tenterfield but
organising it from afar must have been extraordinarily difficult. It
is a lovely idea and a wonderful place and it is a great pleasure
to be here so thanks for persevering.
My topic as you will have seen is federalism and Australian
democracy and I am going to try to use this occasion to bring
these two ideas together. I have been thinking about it for a
while and it may not quite work but let’s see how it goes.
My starting point is that Australians have what to me is
something of an annoying habit of thinking about their federal
system in isolation from the rest of the system of government.
This has been a perception that has been growing on me for
some time but it hit me at the 2020 Summit where, first of all, the
governance group broke down into four streams and one was
democracy and federalism was lumped together with
administration which I found incredibly annoying.
But then eventually they worked out that the combination of
federalism and administration didn’t really work so federalism
was looked at completely in isolation from the other dimensions
of government.
We can see this idea being carried forward insofar as the ideas
that come out of the 2020 Summit require a body to look at
federalism, just federalism and not federalism as it impacts on
everything else.
I hope that as the terms of reference for that body are developed
as they go ahead, if it goes ahead, that some thought will be
given to the way in which the federal system is interlinked with
everything else. Because, not surprisingly, Australian federalism
is in fact deeply embedded in the rest of the system of Australian
government.
If federalism is not working as well as it might, other aspects of
the system are affected. If other aspects of the system are not
working as well as they might, federalism is potentially affected
and reform of federalism therefore may have implications for the
rest of the system, whether for good or for bad and the converse
also is true.
In my view abolition of federalism, every now and again
suggested as AJ just noted in his slides, is not just minor surgery
which was the impression that you would have got from some of
the remarks at the 2020 Summit, but it would require a complete
restructuring of Australian constitutional government. It would
make the search for an acceptable alternative to the monarchy
of which we have made such heavy weather, look like mere
child’s play.
So I want to use the opportunity this morning to explore one key
dimension of the interdependence of federalism and the rest of
the constitutional… system by considering the relationship
between federalism and democracy.
I do that in part because of a suggestion by AJ at a conference
we were both at earlier this year where he encouraged me to
develop this aspect of the presentation I made on that occasion;
and in part also of course my curiosity about the links between
federalism and democracy is prompted by the public opinion
survey to the extent that those responses link the two and to the
extent that survey does reflect popular views on federalism. I am
a little more sceptical about that than AJ but nevertheless that is
a possibility.
But I’m interested in the question of the relationship between
democracy and federalism in any event because in my view
democracy is now the principle contemporary rational for
federalism in Australia. We are accustomed to thinking of the
rational for Australian federalism in terms of history. History of
course provides part of the explanation and that’s an explanation
with continuing relevance because of the extent to which
arrangements which were embedded historically generate
current interest that becomes so entrenched over time that major
change is difficult if not impossible.
And I think that there is nothing wrong with such a historical
legacy. Most elements of most constitutional systems are in fact
past dependent. In our case others include Parliamentary
Government; a constituency based electoral system, a generalist
High Court and the Common Law legal system. And most of
those arrangements are difficult to change for the same reasons
that apply to federalism. But in the context of talk of reform,
particularly the talk of serious reform that is beginning to develop
now, I think it is more helpful to focus on a rational that is less
dependent on the past and more squarly rooted in the present
and the future.
So what I want to do is to develop some relatively brief remarks
along the following lines. Begin by exploring what democracy
might mean in this context, and in doing that suggest there is a
sense in which Australian democracy is in at least as greater
need of rescue and reform as Australian federalism; suggest
ways that federalism and democracy are or might be mutually
reinforcing; suggest ways in which federalism and democracy
have been and continue to be mutually destructive; and
conclude by suggesting some directions for federal reform which
would also advance the cause of Australian democracy.
Now obviously the argument I’m trying to develop today depends
on the definition of democracy and that’s a notoriously slippery
concept in Australia and elsewhere despite it’s well deserved
fame and despite the fact all the respondent’s to AJ’s survey
presumably thought they knew what they meant when they were
talking about democracy. In part this uncertainty about the
actually content of democracy is due to what David Hell
describes as a clear divide between a perception of democracy
as a value in its own right through which individuals are entitled
to political participation as a fundamental mode of self-realisation
and an instrumental perception of democracy as only a means to
the end of, for example, protecting citizens from arbitrary rule. If
democracy is understood in that latter sense it may be very
narrowly conceived. The classic formulation offered by
Schumpeter view democracy as involving no more than periodic
right to choose and authorise governments to act on the citizens
behalf. In Schumpeter’s own words, democracy means only that
the people have the opportunity of accepting or refusing the
men, literally, who are to rule them. If in addition to this, the
people were always conceived nationally, then democracy and
federalism would be antithetical.
It is of course possible to understand Australian democracy as
some what Schumpeterian in character. The energy we have
poured in to the integrity of our voting arrangements, in stark
contrast with the United States, reflects the weight we place on
the moment of election. Our adherence to three year terms for
commonwealth elections may do so to and reference to
governments having ‘the right to govern’ are Schumpeterian in
tone. But our vision of democracy in fact has never been quite
that narrow. On the contrary, even if we were only to perceive
democracy as only as a means of protecting citizens from
arbitrary rule by enabling them to change their governments
periodically, we have also always distributed powers both
horizontally and vertically, the vertical distribution of course
representing the federal distribution. And we have relied on that
distribution of power to limit the authority of elected
representatives while in power. And the vertical distribution of
power through federalism also ensures that for each citizen the
chance to accept or refuse the men, and now sometimes the
women, who are to rule them comes along more often than it
otherwise would.
But in fact I’m not convinced that Australians do percieve their
democracy in such narrow terms and if AJ were to do his public
opinion survey again and unpack the understanding of
democracy in the same way he tried to unpack the
understanding of federalism I think he might find that out. But
even in the absence of such a survey, in Australia as elsewhere
in the Western World, it is possible to perceive pressure for a
richer form of democracy which reflects a somewhat higher view
of the capacities and relevant of the people who are at the heart
of it. And at the same time it is possible to detect a range of
concerns about some of the consequence of electoral
democracy as it has been practices over the latter part of the
20th century. Limited participation in politics, disengagement of
citizens from public life, lack of civic knowledge, the quality of
some elected representatives, the winner take all mentality, lack
of respect between elected representatives and spheres of
government and between representatives, citizens and
bureaucrats and so on. You are familiar with the list as I am.
Now no one has any answers, but there are plenty of
suggestions about the desirable characteristics of a more
contemporary approach to democracy; and let me identify five
which I have shamelessly taken from David Held’s work and
which seem to me to have active application to Australian
circumstances: First, more active participation in public decisions
by all citizens including women and young people; Secondly,
minimisation of unaccountable bureaucratic power; Third, open
and free information about public affairs; Fourth, a greater
measure of deliberation in public decision making that seeks
mutual justifiability as an end result; and finally, maintenance of
an open institutional system to enable continued experimentation
with democratic forms.
While the issue only surfaces publically from time to time, for
example in Gordon Brown’s recent green paper, in effect, in a
way were are in the throws of rethinking democratic forms and
practices. The challenge is significant because old habits are so
deeply embedded, but it seems to be two fold. First, can we find
a richer form of democracy that includes desirably these various
additional elements but does not sacrifice the benefits of the
present system in terms of, for example, relative efficiency in
decision making and compliance with the rule of law? Secondly,
how can we adapt our democratic forms so that they also take
account of the greater significance of decision making at the
supranational and international levels and of the impact of
globalisation?
Now let me move to try and bring that together with federalism
and I want to begin by exploring the potential and to some extent
the reality of a productive relationship between federalism and
democracy as it is or as it might be. Now in some respects this
relationship already exists. Federalism is part of the system for
the disaggregation of power in Australia. In fact arguably it is the
principal part. The existence of multiple governments and
parliaments around the country provide the opportunity for
greater democratic participation. These democratic centers
already play a role in civic education. They also, in a sense,
contribute to the minimisation of bureaucracy and before you roll
your eyes in horror let me say that the sense is that the
bureaucratic roll would be even greater if there were no elected
representatives in what are now state capitals responsible for
state functions. And these various democratic centres around
the country as well as in Canberra enable and already play some
roll in experimentation with democratic forms. The examples
again are familiar: the introduction of Ombudsman; the
experimentation of fixed-term or partially fixed-term parliaments;
and now the rights protection at the sub-national level.
Critics will say, and I can see AJ moving in his seat already, that
some of the states are too big and all of them are too centralised
to play these democratic rolls as effectively as they might. At
least on the question of size, I agree and I would not be opposed
to one or two new states in say Queensland or Western
Australia. I also agree on the question of centralisation but I think
that is part of the problem that just needs to be fixed by
attitudinal change. Beyond creating a few new states however, I
think we start loosing the democratic advantages and potential of
the existing state system. Large numbers of constituent units
would also be weaker; would inevitably have different
institutional forms, no parliaments or courts for example; would
loose their significance as democratic laboratories and would be
a vehicle for further centralisation of power.
There is no doubt nevertheless that Australian federalism in it’s
current or adapted form could do a lot more in promoting
democracy and could play a roll in it’s reinvigoration. For
example, because of their geographic proximity to the major
population centres, state systems could be much more inclusive
than they presently are. Representation in state parliament is the
only option for representation in parliaments for many women,
and for that matter men, with families. Family friendly sitting
hours, for example, might be a good idea. Secondly the states
have an opportunity to experiment with democratic forms in a
way that is both unlikely and perhaps undesirable in the national
parliament. Proportional representation, more free votes,
involvements of interested citizens in deliberation on contested
issues, these ideas are a familiar, they are around and they
could be usefully be tested in the state context.
The states could a lot more to use their proximity for the
purposes of civic education and civic engagement and for
building a sense of a political community and the states could
and should do more to work in harmony and collaboration with
Local Government thus fostering democratic engagement at the
local level as well and setting a new tone in intergovernmental
relations. The Commonwealth for its part could do more to
explore the implications of the shift to international decision
making for democratic practices within Australia for both the
national and sub-national levels.
Not only have we failed to take full advantage of the
opportunities presented by federalism to advance and
experiment with the forms of Australian democracy, but in some
respects we have allowed one to drag the other down. One
present and serious manifestation of this unhealthy and
unproductive relation between federalism and democracy is the
quality of governance at the state level. Some state
governments, some state members of parliament, and some
state bureaucracies. I don’t want to overstate the problem
because obviously there are many great people at the state level
doing a terrific job and nor is the problem of quality and limited
capacity necessarily confined to the states. It can be detected at
all levels of government to a greater or lesser degree. Some of
the problem also lies in perception rather than reality. But it is
also a fact that the reality is probably is greater than it should be
and if it is, then there is a problem. Now in some respects this
lack of capacity, the inadequacies of performance, are a
consequence of our political system and the relatively small pool
from which elected representatives are drawn. But it has been
exacerbated by federalism to the extent that the continued
centralisation of power through the commonwealth’s fiscal
dominance and through intergovernmental cooperation in which
the commonwealth plays the leading role makes involvement at
the state level a less attractive option both for would-be
politicians and bureaucrats. The problem is further aggravated
by repeated suggestions that the states should be abolished,
leading people who believe that, to believe that this is a passing
problem which could be solved by the disappearance of one
level of government and as a result of these various factors, the
expectations of state performance tend to be somewhat low and
the willingness of the states to take responsibility for their own
functions and the willingness of their citizens to insist that they
take responsibility for their functions are both somewhat
diminished.
We have tended to make a joke of this in the past. You
remember the old saying, the state politician saying that the only
good tax is a commonwealth tax ho ho ho. But now it is serious.
This is primarily a failure of democracy not a failure of federalism
and some of the events that have taken place in state
governments and parliaments in recent months bring all
governments and parliaments at all levels of government into
disrepute.
I agree with Ken Wiltshire whose absence today I very much
regret; that it is urgent in the interests of democracy as well as
federalism to restore capacity, self-respect and self-reliance at
the level of the Australian states to the extent it is diminished;
and I note in passing the contrast with the quality of governance
in New Zealand where I sometimes think the decision to not join
the Australian Federation appears to have been vindicated at
least to this extent.
A second manifestation of an unproductive relationship between
federalism and democracy effects to the commonwealth. As
Australian federalism has evolved the commonwealth has more
money than formal power. Its formal power has expanded as
well and the process by which the commonwealth experiments
with the reach of its power also I think has sometimes untoward
consequences for quality of governance at the commonwealth
level. But that is a complicated lawyers point and I’m not going to
explore it further here, I’d prefer to concentrate on the fiscal
question.
Because of this imbalance between power and money, the
commonwealth therefore relies heavily on spending to extend its
policy reach, both in the form of grants to the states and in the
form of grants to other recipients. Even when legislation
accompanies these programs, the legislation is opaic and often
masks policy choices. The higher education funding legislation is
a case in point. But often there is no legislation further
diminishing both transparency and the accountability of ministers
to parliament, to voters and to courts in a different sense of
course.
Finally and perhaps most obviously, the network of
intergovernmental arrangements that is a product of federalism
impacts on democratic arrangements in both the commonwealth
and state spheres, although it effects the latter more severely. I
won’t labour the point here because I have laboured it to often
before and one of those efforts is in your background reading.
But I note that intergovernmental arrangements do detract
significantly from the openness of Australian government which
otherwise is one of the strengths of which we should be proud.
And intergovernmental arrangements also are a factor that
contributes to the weakness of Australian Parliaments already
relatively weak thanks to the nature of the system and the
relationship of parliaments with their respective governments
partly underpinned by the strength of the Australian party
system.
So let me now move to some possible directions for change for
consideration during the course of this conference. Despite
statements to the contrary, neither Australian federalism nor
Australian democracy is in a truly dire state, certainly in
comparative terms. But both could do with a certain amount of
surgery. My argument today is that it is impossible to operate on
one without affecting the other. Or to put it more positively,
federalism reforms will be enhanced if they are developed with
the needs of Australian democracy in mind, and the converse
also is true.
So against that background some directions for federalism
reform include the following. First, clarify the functions, either de
jure or de facto, the latter may be more straightforward, to
ensure that there are clear areas of appropriate responsibility at
both commonwealth and state levels. The distribution should
leave the commonwealth with both the capacity and obligation to
perform effectively and accountably at the international level and
it should leave the states with functions for which they can
properly take responsibility, in other words this is to put
subsidiarity into practical effect. Secondly where national policy
is considered to be required for whatever reason, leave
implementation to the states as a default position and with
implementation significant discretion to the states to determine
how best to achieve nationally agreed outcomes. Thirdly if it is
no longer possible to redistribute tax-raising power and I think
we have reached that point, put revenue redistribution on a basis
that makes it clear that the various Australian polities are entitled
to a share in the revenues raised from the Australian people and
each is responsible to their people for spending it. Fourthly, insist
on mutual respect between all three spheres of Australian
government not because they have rights but because they
represent a sector of the Australian people. Next, insist on high
quality performance at each level, enforce through accountability
to the people, or the relevant section of them, rather than by
accountability to another level of government. Next, provide a
structure for intergovernmental arrangement that ensures
transparency, accountability, responsiveness and legality or
lawfulness. Acknowledge the need to enhance Australian
democracy and encourage the idea of states as laboratories for
it leading to new democratic forms and practices that respond to
the needs and interests of citizens and that engage them more
fully in public life. As part of that exercise attract a wider range of
Australians into public life including women and young people.
Second last, involve Local Government fully as the third tier of
government again because of its capacity to contribute to
democratic life and finally, create a few more states if people
want them and most obviously make the Northern Territory a
state. Although in my view, this may prove something of a
distraction from the main game. Thank you.
A J Brown
Thank you very much Cheryl, we have time for a few questions.
IF anyone like to throw a question into the mix right now please
say who you are and where you are from, if that is convenient.
Chrissie Sharp
Cheryl, Chrissie Sharp from Western Australia. I just wondered
why you made the assumption at the beginning that if we in
some way abolish the states and presumably move to say a
regional system, that would not be a parliamentary system?
Cheryl Saunders
Well, the smaller the units get the weaker they are likely to get.
We would not set up the same institutions at the regional level at
the state level. I can’t imagine that you would reproduce those
institutions.
Chrissie Sharp
But you would, presumably, see some democratic
representation
Cheryl Saunders
Sure, you would have some regional councils of some kind that
is absolutely true. Almost certainly I would think exercising some
delegated authority from the Commonwealth. It is possible they
might be set up as some sort of federal system but I suspect that
is unlikely. So you are quite right I am making the assumption
that if we set up a large number of regions it will be much more
of a devolved system than a federal system, the regions will be
weaker both in institutional terms, in terms of the scope of their
power and in terms of autonomy. John.
John Williams
Cheryl I was wondering have you actually thought about the
connection made between republicanism, republican theory, and
federalism. As we know republicanism was initially hostile to
democracy, although market economy theories have reconciled
themselves with that. So a republican theory sees virtuous
citizens being engaged in local governance but also finds the
institutional checks and means to actually create clashes to
create an informed and in a way testy dialogue between different
groups. That’s part of the message we hear as federalism and
democracy but it is a bigger picture as federalism and
republicanism. I am not so concerned about the monarch more
the governance theory.
Cheryl Saunders
Yeah I think that’s right. You know more about republicanism in
that sense than I do. But I must say as you look at some of the
literature on deliberative democracy and the way in which that
assumes an informed and engaged, deliberating citizenry then it
comes quite close to notions republicanism in that sense and if
that is right, on the assumption that sooner or later the republic
debate gets going in Australia, it may have some capacity to
broaden beyond the question of head of state. But not to
broaden it in the way in which people tried to broaden it in the
1990’s which is to sweep up the whole bill of rights debate
although I suspect we may see that again as well. But to
broaden it in the way of saying what do we mean by actually a
republican approach to government and to the extent that also
enlivens the citizenry I think that would be a great thing and your
quite right it runs right into these ideas.
Jim Snow
Jim Snow, Beyond Federation. Aren’t you assuming that the
remedies that you have suggested have been tried for about 107
years now without effect? Humans being what they are, they will
continue to be tried under the present federal system for many
years, perhaps centuries. In other words, we have given it a
good go for 107 years and shouldn’t we be thinking differently,
beyond the current federal system?
Cheryl Saunders
I’m not sure what ‘IT’ is, and I don’t think we have been trying to
develop this link between federalism and democracy, I don’t
think we have particularly made the link between federalism and
democracy in any meaningful sense in the past. So I am
considering in my own terms a reasonably radical approach.
Now it may not work, but I think it is worth a go. There are two
sides to what I am saying. One is I think there is a lot of potential
for developing the federal system in a way that assists with
Australian democracy. Secondly I also think that by abolishing
the federal system we are talking in a void, we actually don’t
know what to put in its place and all the likely solutions that have
been suggested; regionalism; two tiers of government; are so
undeveloped and I can’t think of a way of developing them which
would meet the needs of Australia. I think that to regionalise
Australia would be essentially to centralise it, with a lot of local
centres of people sort of beavering away without exercising any
significant power.
AJ Brown
One more question very briefly from Norman at the back and I
should say that I knew that we would have in the room the
complete spectrum of diversity of opinion of responses to the
surveys including people who think we should get rid of the
federal government (the 7% of people who believe that we
should get rid of the federal government) and I have to dob in
Norman as someone who fulfils my dream of having everyone
represented in the room. That may not relate to your question.
Norman Abjoransen Norman Abjoransen from the ANU. It is more a comment than a
question. I have grappled with this notion of trying to teach 1st
year students what democracy is and I keep coming back to
George Orwell’s quote about democracy: “every time you hear
the word democracy substitute the word plog and it makes as
much sense”. I think that in any discussion of democracy we
come back, particularly with the way it is practiced in Australia.
But I am curious when those questions were put, what those
respondents had in mind when they gave a considered opinion
about democracy. I think there is an underlying, too often
unspoken, antagonism between liberalism and democracy. They
are at war with one another. I think in the post-war years we had
democracy in the ascendency, since in about the mid 1970’s we
have had liberalism in ascendency. We have seen the neoliberal agenda, we have seen privatisation which has actually
shrunk the public sphere. You’ve got external agencies like the
WTO constraining the Commonwealth but then something like
the national competition policy really is a constraint on the
states. If one of the strengths of federalism is policy innovation
then the states have less and less space in which to operate. I
suppose my broad comment is that we can’t disaggregate a
discussion of democracy, the shrinking public sphere, without
looking at commercial and other interest sort of pressing down
on it, when democracy is being squeezed from every direction.
Cheryl Saunders
I agree with that and I guess that once you put that into the mix
as well its not just federalism it’s the shrinking public sphere
that’s impacting on the states. But where does that take us?
Does it take us again to the abolition of one level of government
or does it say well lets make the very best we can in terms of a
rich democratic life with the system we have and god knows in
what direction that will move in the future. Maybe the economic
crisis will expand the public sphere again at least for a little
while.
A J Brown
Thank you very much Cheryl, if you wouldn’t mind thanking
Cheryl again.