The Need for Reforms
Discuss about the Comparative Reflections on Commonwealth.
The need for reforms: different studies have revealed that after the 1970s, there has been a significant rise in the support for Commonwealth. A large number of people agreed that more powers can be taken from the States by the Federal Government as compared to the past. It can be understood that there has been a development in the needs of the society in Australia after the federation in 1901. The federal structure of Australia fails to match this development that has taken place in the 21st-century. The original text of the Constitution also allows for such gradual evolution. Starting with the unfavorable interpretation of the powers enjoyed by the States made by the High Court, over the time, the Commonwealth has succeeded in achieving greater financial power (Herscovitch, 2010). However, this took place at the expense of the States and can be seen in the form of greater centralization or the control of the Commonwealth over the things that were traditionally considered as the areas of policy belonging to the States.
The shift that has taken place in the balance of power and in favor of the Federal Government means that the benefits of federalism are not anymore present in the federal system of Australia. Instead of arguing with the present trend in favor of conquering federalism, it should be ensured by the reforms that Australia derives benefits from the cooperating scheme of federal relations. At present, the greater centralized agenda has replaced regional representation. There is a shift in favor of national policies in all the instances which means that the benefits available in case of competitive federalism are ignored. Being one of the most centralized federations in the world, the continents on this path will result in further "withering away" of the States, exacerbating the inefficiencies that exist already (Head, 2006).
The options for reform: In this context, several constitutional changes can be made for the purpose of improving the federal presence in Australia. For example, the enumerated list of state powers present in Canada can impose a limit on the powers of the Commonwealth and at the same time it would also restrict the High Court from interpreting the federal powers in a wide manner. But it is worth mentioning that this is not a practical solution. There are several other solutions that can achieve similar results, but without the need for such widespread constitutional changes (Harris, 1993).
Options for Reform
Another avenue present in the field of constitutional reform is to amend section 90 for providing power to the states to levy their own sales taxes. Because the GST grants are distributed between the states and territories, they will become accountable for levying and appropriating tax revenue. As a result, the present accountability split between the Federal Government and the States would improve as a result. Therefore the States may be able to pursue their own policy objectives that are in tune with competitive federalism. We defend an initiation process is also not favorable for the States. As the defender can be proposed only by the Commonwealth, those proposed are generally in favor of an extension of the powers of the Commonwealth. By allowing the states to initiate referendum process, there can be a shift in this balance back in the favor of the States (Gilbert, 1986). For example, if the majority of States favored a particular proposal, it can be put before the people at a referendum. By introducing a requirement of a minimum number of States that are in favor of an initiative will also provide a safeguard against the proposals that are not beneficial for the majority of people in Australia.
New interpretation of the Constitution: The approach adopted by the High Court towards Constitution intimidation and a significant effect on federal balance. Therefore a return to the doctrine of the reserved powers will inevitably result in a conflict with the decision given in the Engineer's Case, a significant scope is present to accommodate the federal nature of Constitution in judicial practice. It was mentioned by Kirby J in NSW v Commonwealth (workchoices) that the significance of constitutional interpretation reveals the federal Constitution. It was mentioned by His Honor, in dissent that the interpretation of the enumerated powers of the Commonwealth individually without considering the constitutional limits will result in restricting the effectiveness of the federal protections, which prevent the power from accumulating in one central government (Gerritsen, 1989). The States should be less willing in future to accept the limitations on their powers that have been imposed by earlier decisions of the High Court. The powers of the Commonwealth should not be exercised without considering the effect of such exercise on the States.
It is worth mentioning at this point that the Constitution of Canada has been interpreted by Supreme Court with greater regard to federalism, as compared to its counterpart in Australia. This resulted in protecting the Provinces from. Using their powers to the federal government as has taken place in Australia. In the same way, the UK Supreme Court also has the authority to adjudicate cases related with devolutionary issues. As it was only established in 2009, a limited number of cases have come before the US Supreme Court. Along with the development off the jurisprudence of the court, the approach taken by the court regarding devolutionary matters can play an important role in the evolving relationships between jurisdictions in the UK (Galligan, 2008).
New Interpretation of the Constitution
Reallocation of responsibilities: the federal relationship can also be improved by elevating policy responsibilities among the Commonwealth and the States. There is a need for greater recognition that it is not possible to solve every problem with the help of greater centralization, particularly if this is not underlying cause of the problem. At present, a tendency is present to assume that problems can be solved with centralization or merely a cursory examination without necessarily evaluating the underlying causes of the problem. Wherever practicable, there should be the responsibility of one level of the government to administer a particular field of policy for improving accountability and certain the and also to restrict the amount of blame shifting that takes place between the governments (Fenna, 2008). It is important to allocate responsibilities between the governments on the basis of the principle of subsidiarity in order to ensure that State, Territory and local governments remain primarily accountable. Therefore, for instance, there are several referral entries, where generally healthcare falls within the purview of one level of government. Therefore, instead of the Commonwealth continuing to gradually require more control over health issues, so far as practical, this field should be left under the scope of State responsibility.
It is important to consider other factors like the benefits that can be achieved by harmonization or economies of scale while introducing a change in roles and responsibilities. Moreover, changing the elevation of responsibilities between the Commonwealth and the States without increasing VFI reveals that the reforms in this field are inextricably related with financial reform. Very elevation of responsibilities can be achieved by constitutional amendments, a referral of power from the States to the Commonwealth or when the Commonwealth vacates a field of legislating power that has been occupied by it (Fenna, 2007). However, due to the reason that most of the federal relationships in Australia play out in political processes, it can be conceived that the reallocation of responsibilities can also take place through this medium without requiring the constitutional reform.
Reform of intergovernmental bodies: A significant forum is provided by intergovernmental bodies like CAF and COAG for the representatives of the Commonwealth, states, territories and local government to develop and discuss policy initiatives. But these bodies are dominated by executive and they inevitably decrease the accountability of their agreements because the Parliament does not have any chance to evaluate the proposals until they have been adopted by the COAG. Therefore, it can be recommended that reforms should be introduced in COAG for the purpose of improving its operations and functions.
Reallocation of Responsibilities
As a result of constitutional recognition, COAG will be entrenched as a fixture in intergovernmental relations, and it will be granted legal status and more legitimacy as compared to the present situation. Similarly, the recognition will also prevent the sidelining of COAG by the Commonwealth in political process. This would ensure that there is always a legitimate forum available that can be used by the Commonwealth, states, territories and local governments to meet with each other (Bell, 2006). In this context, some experts have warned that recognizing a body that is dominated by the executive, further erodes the significance of parliamentary responsible government in the political system of Australia. On the other hand, statutory recognition of COAG will provide the advantage of more legal certainty had at the same time it will avoid the rigidity of constitutional enactment. Either path to recognition is going to result in the possibility of judicial review of either the constitutional provisions or the statutory instruments. It is possible to improve the representation of the states, territories and local governments within the COAG with the help of greater control over the agenda and by holding meetings at a time that is more suitable for all the parties. All the members of COAG should be allowed to bring items on the agenda instead of the process being dominated by the Commonwealth alone (Beattie, 2002). Commonwealth should not be allowed to use the COAG in such a way that the States become subordinate. Instead the need is that it should favor of co-operative approach at all levels of the government (Aroney, 2008). In the end, an independent Secretariat of COAG that does not fall under the Commonwealth Department of Prime Minister and Cabinet would also allow the COAG to play its role as cooperating federal forum.
Local Government: It is not possible to achieve the improvement of the federal system of government in Australia without ensuring that all the levels of government including the local government are in a position to manage and implement their respective responsibilities. In this regard, it is worth mentioning that generally the role played by the local government is overlooked. In case of the discussions related with federal reform. As a result of State legislation, there are nearly 650 local government authorities in Australia. During the recent times, a tendency has been seen among the local government to assume responsibility for public transport, local public works, town planning, waste disposal etc. These responsibilities have increased significantly during the last few decades. There are several local governments that are also taking responsibilities in areas of community safety, environmental management and arts and culture (Ariadne, Gelber and Guaja, 2009). Because they are the creature of state governments, the local governments do not enjoy the same level of autonomy and independence that is available to the other levels of government. Due to this reason, the local governments are particularly vulnerable to cost shifting and limited sources of revenue and ever-increasing responsibilities. According to estimates, merely one third of the revenue of the local government is own source revenue and the rest comprises the grants given by either the State or the Commonwealth governments and the result is that several conditions are attached by giving the ground. There was an Intergovernmental Agreement Establishing Principles Guiding Intergovernmental Relations on Local Government Matters. It was signed in 2006 by the Commonwealth, state and territory in local governments. The purpose was to minimize cost shifting, that takes place when the responsibilities are shifted to the local governments. It is believed that if the local governments are properly financed and resources, they will be in a better position to provide for their increasing responsibilities (Geoffrey, 2001).
Reform of Intergovernmental Bodies
The representative of the local governments on COAG is the Australian local Government Association. It is a very significant representation, which allows a chance to the local governments for taking part in their divisions that have an impact on the federal center of Australia. In the federal center of Australia, the place of local government has been mooted with the help of a potential constitutional referendum that was proposed by Gillard government. There were two proposals which recognized the local government, were put to a referendum in 1974 and 1988. However, neither could be adopted successfully.
Financial reforms: there are several federal issues in Australia that are related with the financial marginalization of the States. The reform of the present federal financial relationship in Australia can help in reducing the VFI and at the same time it will also improve transparency and accountability in the system (Neil, 2010).
Income tax: the intention behind the establishment of GST was to grant access to the states and territories to a growth tax. However, it has been noted by the experts that the predicted growth of GST is going to wane with the passage of time. The responsibilities imposed on the states are not going to follow a similar trajectory. As a result, these responsibilities are increasing continuously. For several years, the States have supported a plan that they should be elevated a part of income tax that is collected by the Commonwealth. However, it is not surprising that successive Federal Governments were against these proposals. Due to its progressive nature, income tax results in revenue increasing at a faster pace as compared to the rate of increase in the base. On the other hand, the base of GST remained the same since its introduction in 2000. When Australia's Future Tax System was reviewed recently, it was noted that several overall benefits will be available by allowing the states to receive a share of the income tax from accountability and financial perspective (McGarthy and George, 2010,).
Goods and services Tax: in case of other federations like Canada, the Provinces have more control over the sales tax. Moreover, the provinces are also allowed to levy their own tax at the provincial level. However, the situation is not the same in Australia. The reason is that the State sales tax was declared to be unconstitutional by the High Court. In case the rate of GST is the same as other OECD countries, it can be argued that it is going to replace nearly 65% of the state taxes. The monopoly of the control of the Commonwealth over the rate and the base of GST in Australia are gravely separates the discretion for raising the required amount of revenue from the knowledge of funding that is required to cover the policy objectives of a State. Because as a tax, the intention behind the introduction of GST was for the States and Territories, in case an amendment is not adopted for allowing the states to levy sales tax, then it is important to provide greater amount of control to the states in deciding the rate and the use of funding (Madden, 2006).
Conclusion:
After more than 115 years since Federation, it is suitable time for evaluating the dynamics and the operations of federal system in Australia. Although, only a limited number of changes have been introduced to the text of the Constitution, there has been a significant change in the federal relationship and the States are increasingly becoming marginalized by the authority that is enjoyed by the Commonwealth management.
The culmination of decision-making by the High Court, increasing VFI and intervention by the Commonwealth in traditional fields of state policy have all played a role in the loss of power by the States since Federation. At the same time, increasingly, the policies concluded by the intergovernmental bodies that are dominated by the executive like the CAF and COAG, transparency, scrutiny and accountability of the decisions and the policies of the government have consequently been affected adversely as a result of this trend. The present operation of the federal system in Australia, with its emphasis on executive federalism is against the notion of parliamentary responsible government that is the main component of the system of government adopted in Australia.
Under the circumstances, it can be stated that reforms are required for ensuring that accountability and responsibility in the decision-making by the government are protected in a better way and also it can be guaranteed that the States continue to fulfill their responsibilities. In this report, a number of reforms have been suggested, which included constitutional amendments, financial arrangements and political responsibilities. However, it is also true that the debate related with the future of federal system in Australia is undoubtedly going to continue. This can manifest itself in yet another constitutional challenge by a State. The outcome of the challenge to the Commonwealth's mineral resources rent tax that is led by resource states of Western Australia and Queensland will have a major impact on the federal balance in Australia in the future. If the Commonwealth wins, it will result in the transfer of an even greater amount of financial powers from the states to the Commonwealth. As mentioned by Kirby J in Workchoices, the significance of the federal system in maintaining the basic freedoms by preventing the concentration of power in one central government is necessary. Instead of continuing on the path of future centralization, it is very important that emphasis should be placed on the maintenance of regional policy preferences and diversity. It has been clearly revealed by the research that the citizens were living in federal systems are better off financially as compared to the persons living in other systems of government. But this will not be the case in Australia, as there is a need for restoring the federal balance. In this regard, it is necessary to receive cooperation from all levels of government so that it can be ensured that the federal system of Australia is in a position to face the challenges that are present in the 21st century.
References
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Bell, P. 2006, 'How Local Government Can Save Australia's Federal System,' in Federalism and Regionalism in Australia: New Approaches, New Institutions?, eds. AJ. Brown and J.A. Bellamy. Canberra: ANU ePress
Fenna, A. 2007, 'The Malaise of Federalism: Comparative Reflections on Commonwealth-State Relations'. Australian Journal of Public Administration 66(3)
Fenna, A. 2008, 'Commonwealth Fiscal Power and Australian Federalism', University of New South Wales Law Journal 31(2): 509 – 529
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Gilbert, C. 1986, Australian and Canadian Federalism 1867 - 1984: A Study of Judicial Techniques. Carlton: Melbourne University Press
Harris, P. 1993, 'Financial Assistance Grants in Australia: An Assessment of the Extent of Horizontal Equalisation'. In Federalism and the Economy: International, National and. State Issues, ed. B. Galligan. Canberra: Australian National University Federalism Research Centre
Head, B. 2006, 'Taking Subsidiarity Serious: What Role for the States?', in Federalism and Regionalism in Australia: New Approaches, New Institutions?, eds. AJ. Brown and JA Bellamy. Canberra: ANU ePress
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Madden, J. 2006, 'Australia: Central Fiscal Dominance, Collaborative Federalism, and Economic Reform'. In Federalism and Economic Reform: International Perspectives, eds. J. Wallack and T. Srinivasan. New York: Cambridge University Press.
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