Except for those very familiar with Australian federalism, no one reading the
paper would realize the pervasive significance of‘equalization’in the way the
Federation works, especially its role in addressing what is described as vertical
fiscal imbalance and in the practice of horizontalfiscal equalization. It is
not even expressly mentioned in a statement by the Council of Australian
Governments, issued in April 2015. This statement declares that any realloca-
tion of responsibilities between the governments of the Federation should,
inter alia, aim to‘be fair: all Australians should be able to receive, choose and
access high quality services, regardless of personal circumstances, location or
socio-economic background’.
‘Fairness’, which appears conceptually to embrace equality, may be an
inherent value in any government but it will usually come with costs. The
consequences of a commitment to provision of high-quality services‘regard-
less of location’will certainly be considerable. It will have an impact on
delivery of services, driving economic growth, even upon questions of
accountability and the durability of programmes. But these are considerations
which the green paper ignores.
6.6 Retrieving Federalism from Bureaucracy
Revival and revitalization—one might almost say restoration—of federalism
in Australia calls for some hard thinking on several fronts. One such front is
the weaknesses in terms of self-government and autonomy deriving from
centralized revenue-raising. This weakness is aggravated when subsequent
allocation of revenue to states and territories has an abstract basis in equaliza-
tion methodologies and practices. The crucial link in responsible government
between revenue-raising and public expenditure is thereby both lost and
confused.
A second front antipathetic to true federalism is the persistent quest for
public policy on a national basis, be it in education, health, housing, trans-
port, or any otherfield. It is easy to support a move away from process
stipulations in Commonwealth–state agreements but this really misses the
point. The bureaucratic instinct continues to assert itself in the view that the
test of compliance should be located in standards, results, and/or, most vacu-
ous of all,‘outcomes’. The goal should be state autonomy and hence account-
ability. And accountability should be the business principally of state
authorities and state electorates, not the Commonwealth auditor-general
with augmented powers.
Most of all, ideas of equality, fairness, and, certainly, equalization, a techno-
cratic virus, call for definition and clarity in their application in a federal
Australia’s‘Talent for Bureaucracy’