On the other hand most of Labor's electoral success has come at state level. Organisationally it has always been a collection of state parties with political leaders focused on local issues that gain them electoral success. And while it is true that in recent years the courts have confirmed the supremacy of the national forums of the party, the factions, and the preselection process on which they feed, remain firmly based within state borders.
The result has been an underlying tension between the aspirations of state and federal
Labor politicians, particularly when both are in office at the same time. The 1980s and early 1990s saw bitter and public argument as the economic and fiscal policies of a national Labor government cut hard into revenues of state Labor governments. And of course Paul Keating's attack on Bob Hawke's cooperative federalism in 1991, in terms of the "gravest dangers" of surrendering national responsibilities to the states, helped bring Hawke down.
All of which makes the move by Labor's new leader Kevin Rudd to put the reform of federalism at the centre of his strategy to win government an interesting decision. And I suspect that despite the welcoming cheers of approval from State Labor leaders, there would be more than a few concerns about what the next "new federalism" holds for the declining role of the states in Australia's federation.
Kevin Rudd's motive in adopting the cause of federalism and its reform no doubt reflects a need counter to the way in which Prime Minister Howard has used meetings with the state Labor premiers at the Council of Australian Governments (COAG) to cloak himself in the garb of the bipartisan federation statesman. The success of the PM's strategy is shown by his frequent use of laudatory statements by the premiers about the success of their joint discussions as a counter to claims that he is riding roughshod over the states.
But Rudd also needs to make a positive out of the existence of eight state and territory Labor governments and provide an effective counter to the likely Liberal tactic in the coming election of a "scare campaign" around the consequences of a nation entirely under the rule of Labor (and the unions).
However, alongside these political considerations there are also some very real economic and fiscal imperatives. Labor will need to find some credible financial headroom in the lead-up to the next election. Presumably potential "savings" from overcoming duplication can be earmarked for Labor's election war chest on the basis that only a federal Labor
government could guarantee the cooperation necessary to achieve them.
Perhaps as an indication of the potential difficulties for the Labor states in this strategy is that the potential "savings" being identified by Rudd and his front-bench colleague Bob McMullan appear to be based on the estimates in the recent report by the Business Council of Australia Reshaping Australia's Federation. While the BCA calls for "co-operation, not takeover", its agenda is essentially a centralist one, with calls for the Commonwealth to step in on issues of national importance if cooperation does not bring reform at an acceptable pace. And of course commonwealth governments of both political persuasions are all too ready to define the "national interest" in terms of their own priorities.
The inherent problem for the states, as they face up to calls for another round of reshaping or reforming federalism, is that they do not automatically have common cause when it comes to what each needs or wants from the federation. A perennial problem is the system of horizontal fiscal equalisation. This divides the total pool of GST among the states, so that they can provide comparable services, by providing financial assistance to some states through effectively taking revenue from others. In this case the "others", or donor states, are NSW and Victoria, who subsidise the remaining states and territories to the tune of approximately $4.5 billion.
Beyond the intricacies of federal-state finances, the growing disparities in economic development across the continent also highlight distinctions between the states. This has been brought to the fore in debate over recent interest rate increases and their impact on the so called "two-speed economy", in which resource development is powering ahead in Western Australia and Queensland, leaving the economies of traditional manufacturing states such as NSW in their wake.
The lack of a common purpose that disparate economies engender was also seen in the fracturing of the initiative by the states to establish a carbon trading system, when Peter Beattie and Alan Carpenter quickly moved to protect their coal industries from what they saw as its adverse effects.
It will be fascinating to see if Rudd and McMullan can fashion a policy on federalism that can accommodate the disparities among the states while also resonating with voters. To achieve the latter it will have to promise better services at a cheaper cost.
The danger for the states is that the simplest way to sell that message is for the commonwealth to be seen to "take action". And the history of federalism in Australia is that, once the national government enters into an area traditionally controlled by the states, not only does it never leave; it also goes on increasing its influence, its direct involvement, and its control.
Also avaialble at http://www.adelaidereview.com.au/issues_and_opinions.php
Geoff Anderson teaches in the School of Political and International Studies at Flinders University. He is also part of a project on federalism at Flinders which is being led by Professor Andrew Parkin and is funded by the Australian Research Council.
