COAG Leaders’ Retreat

Symbolic politics, or opportunity to advance overdue reforms?

LAST FRIDAY’S COAG meeting was one of the most anticipated for a long time. Seldom has the nation’s media given such detailed attention to the different perspectives of sub-national leaders.

Usually, journalists in the Federal Press Gallery particularly, are content to rely on the hoary chestnuts of Australian intergovernmental relations when reporting on Council of Australian Governments (COAG) meetings. Personally, I check my watch to see how long it will be before some more or less wizened veteran trots out Paul Keating’s famous observation that there’s nowhere more dangerous than between a Premier and a bucket of money.

Former Australian Prime Minister, Paul Keating — Photo LD Percy, Creative Commons.

Funny how few of them reported Keating’s more recent remarks about Australian federalism. Speaking at the opening of Barangaroo Point in Sydney in late November 2014, the former Prime Minister described the Barangaroo project as a victory for bipartisanship.

He praised New South Wales Liberal Premier, Mike Baird and his predecessors for supporting the project, arguing it highlights the critical role of state governments in driving ­economic growth.

Keating, notorious as PM for his antipathy towards the ‘rent-seeking’ behaviours of State and Territory leaders, might have surprised his former Premier and Chief Minister counterparts with his remark that:

“What happens in states today is more important than what happens in Canberra, in terms of economic growth”.

As he’s quick to point out, Keating knows a thing or two about economic reform. The just released 1988–89 Cabinet papers reveal the extent of the difficulties that gave impetus to the sweeping micro-economic reforms of the 1990s that became the hallmark of the Labor government. This included Bob Hawke’s ‘New Federalism’ and the National Competition Policy (NCP) reforms that are considered the benchmark for intergovernmental policy-making in the national interest.

As Treasurer and later as PM, Keating worked with a cohort of leaders that included five Labor Premiers: Wayne Goss (Queensland), Carmen Lawrence (Western Australia), Michael Field (Tasmania), John Cain (Victoria) and John Bannon (South Australia) and two Liberal/Coalition leaders: Nick Greiner (New South Wales) and later Jeff Kennett (Victoria). These ‘Heads of Government’ (HOGs) were active partners in the reform processes that most analysts agree have underpinned nearly a quarter century of uninterrupted economic growth and the Australian economy’s resilience to external shocks.

At a time when Australia’s political and policy elite are lamenting the lack of leadership to achieve the reform and change necessary to maintain competitiveness and living standards, the implications of Keating’s observation are profound and far-reaching. Intentionally or not, Tony Abbott might just have channelled his predecessor when he announced on Friday that a COAG Leaders’ Retreat would be held in July 2015.

According to Abbott, the fact that no jurisdiction will be going to the polls in the next 16 months, provides a strategic opportunity for long-term reform, relatively free of partisan political pressures. The PM declared he and his state and territory counterparts would meet without officials, but with support from an Expert Advisory Panel who met with leaders at Friday’s COAG meeting, to discuss ‘this whole question of fundamental reform of the federation’.

It’s as well he wants to do this since, hitherto, the White Paper on Reform of the Federation and the White Paper on Tax Reform — both Abbott-initiated election commitments, have received relatively little prime ministerial attention. They scarcely rated a mention as debate raged last week about the fairness or otherwise, of the share of GST revenue that Western Australia would receive if the Treasurer acted on the advice of the independent Commonwealth Grants Commission.

Both White Paper processes are being managed by official task forces, located in the Department of the Prime Minister and Cabinet (PM&C) and Commonwealth Treasury respectively. Five Issues Papers have been released as part of the Reform of the Federation process; public consultations have been held around the country, all intended to canvas views about how role and responsibilities are allocated between the tiers of government, particularly in the key policy areas of: health, education, housing and homelessness, COAG itself and federal financial relations.

After delaying its release until after the NSW election on 28 March, Treasurer Joe Hockey issued the Tax Reform discussion paper on 30 March 2015. He hopes it will be the catalyst for a ‘national conversation’ about the future design of Australia’s taxation system.

At officials’ level, considerable time and effort has been invested at all tiers of government in both White Paper processes and in sector-specific intergovernmental negotiating and decision-fora. They might dread the prospect of their respective leaders free-wheeling on important policy matters at a love-in coordinated by the federal bureaucracy, however, for the first time in a long time, sub-national leaders have an opportunity to deal themselves into positions of individual and collective influence in reshaping the bargain at the heart of Australian federalism.

Expect plenty of jockeying as the current crop of sub-national leaders try to position themselves as heirs to that celebrated cohort of earlier reformers. Almost all of them got coverage last week that played well to their domestic constituents. As Colin Barnett railed against the injustices inflicted on his state and the lack of support from his sub-national colleagues, other Premiers, notably Tasmania’s Will Hodgman and South Australia’s Jay Weatherill, made the most of the rare opportunity to turn the media spotlight on the deficiencies of our current federal design.

Expect more from Mike Baird, Annastacia Palaszczuk and Daniel Andrews as the July meeting looms. Separately and together they have a lot to lose — not least $80b that was wiped unilaterally and without consultation by the Commonwealth in last year’s budget. But they might find they also have something to gain. As long as revenue features as part of that, and any new settlement redresses the abject financial dependence wrought upon them by the vertical fiscal imbalance, then they should embrace the opportunity.

It could prove to be more than only a cynical attempt by a PM fighting for survival, to sustain support in the Coalition party room against the backdrop of tanking polls. 18 Western Australian MPs are not alone in wanting sustainable solutions to State and Territory budget woes, including the formula by which the distribution of GST revenues is determined.



Anne Tiernan is a Professor in the School of Government and International Relations at Griffith University. Professor Tiernan’s research focuses on the work of governing. Her scholarly interests include: Australian politics and governance, policy advice, executive studies, policy capacity, federalism and intergovernmental coordination. She has written extensively on the political-administrative interface, caretaker conventions, governmental transitions and the work of policy advising.

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