Pmsp Unit 1

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Part 2 – Diagnostic Essay – Our broken system of federalism Introduction
Wanna’s (2007) overview of the ‘Policy Roundtable on Federalism’ hosted by the Academy of Social Sciences in Australia (ASSA) and the Institute of Public Administration Australia (IPAA) describes many of the challenges facing Australian Federalism as seen by its participants. These include the demarcation of the roles and responsibilities and improving the accountability and impact of the Council of Australian Governments (COAG) can have.

Wanna (2007) notes there is conflict surrounding remaining faithful to the ideals of federalism as it is often difficult to contain government ambition and help them succeed with deliverables. He says this highlights the real issue – does federalism work in a modern Australia or is it a ‘nuisance’ and whether a unitary system is more suitable for given the rise of globalisation, the growth of trans-national companies and other international pressures.

As Allsop (2008) and Bennett (2006) infer, our system of federalism is failing and needs to be addressed before the power-shift between the Commonwealth and the states becomes intolerable.

Our federation – broken or evolving?
Many identify the flaws in our modern federal system as being excessive administration (Tiernan 2008), buck-passing and blame-shifting (Allsop 2008; Carling 2008) and duplication (Black 1998).

Bennett (2006) and Carling (2008) note the widespread view our system of federalism, although it has generally worked well in its evolved form, has been failing for sometime and is not serving a modern Australian society well. Along with Black (1998), they discuss how Vertical Fiscal Imbalance and Horizontal Fiscal Equalisation has played an important part and needs addressing.

Decisions of the High Court have resulted in a shift of fiscal balance where referendums on this topic failed (Keating and Wanna 2000).The Court has influenced how our federal system works by, from...
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