White Paper on the reform of the Federation: implications for Australian local government

1 Sep 2014

Executive summary

On 28 June 2014 the Office of the Prime Minister announced the ‘White Paper on the Reform of the Federation’. The White Paper was initially devised in the Office of Prime Minister and Cabinet following the swearing in of the Abbott Government on 18 September 2013. The development of the Terms of Reference (ToRs) was subsequently handed to the Council of Australian Governments (COAG) with the process being guided by ‘a Steering Committee comprising the Secretaries and Chief Executives of the Commonwealth Department of Prime Minister and Cabinet, State/Territory First Ministers’ departments and the Australian Local Government Association’. The schedule for the White Paper has continued apace, with the ToRs being released on the day of the announcement, ‘Issue Papers’ scheduled to be released in the second half of 2014, a Green Paper scheduled for the first half of 2015 and the White Paper itself due to be delivered to Government by ‘the end of 2015'.

Ostensibly exercises of this type are pursued in a spirit of a-political inquiry. However, as pointed out with respect to the findings of the Abbott Government’s ‘Commission of Audit’ released in June of 2014, the overwhelming assumption is that they are engaged to produce recommendations that have a grounding in a particular political economy. Prima facie this would appear to be a reasonable assumption about the White Paper on Reform of the Federation. As such, from the perspective of local government the announcement of the White Paper could be viewed as cause for concern, as well as being an opportunity for reform.

Historically, the replacement of Labor governments with their conservative counterparts has been followed by a diminution of direct funds flowing to local government. Further, attempts at achieving constitutional recognition for local government in 1974 and 1988 have been characterised by party-political disagreement and framed around flows of direct funds from the Commonwealth to local government. With this track record in mind representatives of local government might be expected to be concerned about the sector’s future financial robustness and its role as the third tier in Australia’s democratic fabric. However, a more nuanced analysis of Australian political history, one which takes into account the engagement of all sides of politics with the contested nature of regionalism, understood in a variety of spatial, ideational and party-political ways suggests that the White Paper process ought not to be presaged as a party-political conflict. In the discussion below we argue that the local government sector ought to play a crucial role in defining its own future in the context of the White Paper.

This ‘Draft Background Paper’ is divided into four main parts:

  • Section one examines the ToRs of the White Paper, arguing that there is cause for concern that the local government sector will be diminished, but that the White Paper also presents the sector with an important opportunity to pursue reforms.
  • Section two examines the historical record to support this assumption, providing a brief account of the party-political history of the Commonwealth’s relationship with local government in the post WWII era.
  • Section three counters this narrative by examining the contested nature of regionalism in Australia’s political history and the relationship of this history with local government. In so doing we draw on the work of A. J. Brown.
  • In section four, following Allan we identify three ideal-type responses available to Australian local government over the next 18 months, a ‘minimalist’, a ‘maximalist’ and an ‘optimalist’ response.
  • We argue that the sector ought to realise the imminently political nature of the ‘White Paper’ process, reject a ‘third way’ or so-called ‘optimalist’ approach and embrace the possibilities for reform and revitalisation presented by the White Paper.

This paper has been prepared to promote discussion. Comments to the authors are welcome.

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