Federalism POLS 2103 Australian Democracy Types of federal systems Federal structure weakened by: government perspectives have often worked to boost national government power the national government has increasingly controlled the national purse-strings
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Sir Edward Deas Thomson
“Their interest suffers, and must continue to suffer, while competing tariffs, naturalization laws, and land systems, rival schemes of immigration, and of ocean postage, a clumsy and inefficient method of communicating with each other, and with the Home Government on public business and a distant and expensive system of judicial appeal exist…”
- Select Committee, Parliament of Victoria, 1857
“Looking to the state of affairs in Europe, and to the fact that it is the unforseen which happens in war, the defence forces should at once be placed on a proper footing; but this is, however, quite impossible without a federation of the forces of the different colonies”.
- Report of Major-General James Bevan Edwards, 1889
Federation Father or Great Opportunist?
Sir Robert Garran
Federation “left for dead by the politicians”…but “brought to life by the people”.
“I have seen Mr Barton and I have urged the necessity of making this movement a citizens’ movement”.
- Sir William McMillan
To Barton, June 1894:
“All we want is an Organisation and a Program. At present we are running about looking for an enemy, like a lot of new recruits, and tumbling over each other: we want a General to map out a plan of campaign”.
Two weeks later…
“Tell uswhat we are to do in order to bring about the desired result”.
“The politician, having impugned his calling, has to call forth a voice that can restore its legitimacy. He instates the people as a disembodied presence capable of an altruism that he and his colleagues can never achieve. The people are inscribed as citizens, owning no class distinction or party loyalty. They speak at his command and then fall silent as the business of government is subsumed into the Commonwealth that the politicians bring into being”.
- Stuart Macintyre, 1998, “Corowa and the Voice of the People”
Turnout on Commonwealth of Australia Constitution Bill Referendum 1899
% eligible voters
Nearest general election
‘Yes’ voters as Percentages of Electors
Qualified to vote
Colony 1898 Ref. 1899 Ref. 1900 Ref.
WA - -46.6
All Colonies 30.142.9
Source: L. F. Crisp, Federation Fathers, p. 149
‘Yes’, ‘No’ & ‘Don’t care’
Source: C. M. H. Clark, Select Documents, p. 517.
1891 Federal Convention
17 Australian born
24 born in the British isles
1 on the Isle of Man
Sole Labor voice
(but elected on a liberal ticket)
Central Federation League
Class A (53)
Professional men, medical and legal
Class B breakdown:
Shipping interests (5)
Land, building and investment (18)
Insurance and banking (24)
Class B (73)
“The Australian banks do not possess, as those in this country do, a great central institution from which sources of supply in the form of legal-tender may be obtained…the advantage of a central bank, equipped as the Bank of England is, is of great service in time of pressure”.
- Bankers’ Magazine, London, 1893
“The Federal question is nothing but a commercial movement from beginning to end”.
“…the federation of the Australian colonies would meet, and finally settle, the difference of opinion that now exists between us and the English capitalist”.
- Sydney banker, Barton Lodge, 1899
A feature of Australia’s federal system is that power over spending and policy-making is being increasingly concentrated in the Commonwealth.
This follows from the fact that the states have relatively large spending responsibilities but relatively few own-revenue sources whereas the Commonwealth has substantial power to raise revenue but relatively few Constitutionally-assigned spending responsibilities.
The difference between the expenditure responsibilities of each tier of government and the own-source revenues available to that tier is called vertical fiscal imbalance. Australia is characterised by a relatively high degree of vertical fiscal imbalance compared with other federations. A consequence is that the states depend heavily on Commonwealth grants for revenue.
The Commonwealth provides financial assistance to the states and territories in the forms of general revenue assistance, mainly GST revenue and specific purpose payments (SPPs).
The distribution of GST revenue is governed by the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations. This provides, among other things, that:
State governments should receive funding from the pool of Goods and Services Tax revenue and health care grants such that, if each made the same effort to raise revenue from its own sources and operated at the same level of efficiency, each would have the same capacity to provide services at the same standard.
The principle thus seeks to ensure that each state has the financial capacity to provide services at national average levels and at average levels of efficiency. There is, however, no obligation on the states to provide the services they are funded for.
The Australian Audit has found democratic strengths in the areas of:
It has found deficits in: