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The Committee's Inquiry

I Functions of the Federal-State Relations Committee

The Federal-State Relations Committee was established in May 1996. The Committee is a Specific Purpose Committee appointed by resolution of the Council and of the Assembly. The Committee functions as a Joint Investigatory Committee and has the statutory power to conduct investigations into the matters listed below.

That:

a)				pursuant to section 4A of the Parliamentary Committees Act 1968 , a Specific Purpose Committee, to be called the Federal-State Relations Committee, be appointed; and
b)				the functions of the Federal-State Relations Committee be to inquire into, consider and report to the Parliament on any proposal, matter or thing connected with relations between the Commonwealth Government and State and Territory Governments, if the Committee is required or permitted so to do by or under the Parliamentary Committees Act 1968 .

II Appointments to the Committee

The Federal-State Relations Committee consists of nine Members of the Parliament of Victoria, drawn from both Houses and all parties.

No 3 - Tuesday, 28 May 1996

5			FEDERAL-STATE RELATIONS COMMITTEE - The Honourable R I Knowles moved, by leave, That, contingent upon the Legislative Assembly concurring with the Resolution to appoint the Federal-State Relations Committee, the Honourables G B Ashman, B T Pullen and W I Smith be members of that Committee.

Question - put and resolved in the affirmative.

No 42 - Thursday, 3 April 1997

5			FEDERAL-STATE RELATIONS COMMITTEE - MEMBERSHIP - Motion made, by leave, and question - That Mr Mildenhall be discharged from attendance on the Federal-State Relations Committee and that Mr Dollis be appointed in his stead (Mr Gude) - put and agreed to.

III Terms of Reference of the Federal-State Relations Committee

The Committee received its Terms of Reference on June 25 ^th 1996 ( Victorian Government Gazette, G 26, 4 July, 1996, pp 1706-7):

The Governor-in-Council, acting under section 4F (1) of the Parliamentary Committees Act 1968 , by this Order requires the Federal-State Relations Committee to inquire into, consider and report to Parliament on overlap and duplication of roles and responsibilities between the Commonwealth and the State; and areas of responsibility for which the States should have an enhanced role for the benefit of the Federation, and in particular to:

1. To inquire into and make recommendations about the specific nature and extent of problems associated with overlap and duplication of roles and responsibilities between the Commonwealth and the State, including:

i) the desirability of developing general principles for assigning roles and responsibilities, and what such principles might be;
ii) if different principles should apply to different functional areas, recommend which should apply to what areas; and
iii) identify reform opportunities for Commonwealth-State financial relations to give the States a secure revenue base; and to

2. Identify areas of responsibility for which the State should have an enhanced role for the benefit of the Federation, with particular reference, but not necessarily limited to:

i) the role of the Senate;
ii) examining the use and operation of federal decision-making institutions with a view to recommending improvements.

3. Examine options for improved technological links between the Federal and State Governments and related organisations.

In addressing the terms of reference, the Committee should take account of initiatives of the Leaders' Forum and the Council of Australian Governments (COAG), and of individual Australian governments.

The Minister responsible for the Inquiry Terms of Reference is The Honourable J G Kennett, Premier.

IV Introduction to the Report

This is the Third Report of the Federal-State Relations Committee arising out of its Inquiry into overlap and duplication of roles and responsibilities between the Commonwealth and the State; and areas of responsibility for which the States should have an enhanced role for the benefit of the Federation.

The Committee tabled its Second Report in October last year. That report contained a number of findings, arising out of the Committee’s consideration of developments in Australian federal-state relations over the past decade. In the conclusion to that report, the Committee stated that it would put forward recommendations following a full consideration of forms that intergovernmental institutions take in other federations. That is the focus of this Third Report.

This report offers a thorough-going comparative analysis of federal institutions in Canada, the United States, Germany and Belgium. It also considers the framework for Scottish and Welsh devolution in the United Kingdom, and examines the institutions of the European Union, which are quasi-federal in character.

In examining these other federal systems, the Committee has noted the often high degree of sophistication exhibited by their intergovernmental institutions, which enable states in these federations to play a vital role in the life of the nation. This is the essence of federalism. If Australian federalism is to prosper, and if the Australian States are to play a dynamic role in the future government of Australia, Australia must learn from the example offered by these other federal systems.

This report draws on these comparative observations, and on the findings of the Committee’s Second Report, to make a number of recommendations for the development and enhancement of the Australian federal system. These recommendations address Articles 1 and 2 of the Committee’s Terms of Reference, and have been grouped in chapters corresponding to the issues raised in the Committee’s Terms of Reference. In Chapter 8 the Committee has arrived at a number of recommendations of principle for the allocation of roles and responsibilities between the Commonwealth and the States. The recommendations in Chapter 9 put forward a new model for enhanced Australian intergovernmental institutions. Chapter 10 puts forward recommendations for increasing the responsiveness of the Senate to State concerns, and calls for a comprehensive community debate on the need for more substantial reform of Australia’s federal upper chamber. Chapter 11 analyses the options for reform of Commonwealth-State financial relations.

The Committee’s Terms of Reference have required it to consider matters beyond the jurisdiction of the Victorian Government. As the Committee notes in Chapter 9, progress on many of the Committee’s recommendations will require political co-operation between the Victorian and other State Governments, and the Commonwealth Government. The Committee therefore hopes that these other governments will take some notice of its recommendations, and that the Victorian Government will continue to pursue reform of the Australian federation in intergovernmental forums. While accepting the political hurdles faced by any federal reforms, the Committee believes its recommendations to be achievable and in the interests of the Australian federation; and political co-operation to bring about change becomes easier when there is a clear model for governments to work towards.

Of course, this report does not represent the final word on the reform of Australian federalism. Even within the confines of the Committee’s Terms of Reference, issues remain to be addressed. The Committee has given extensive consideration to the operation of Australia’s Heads of Government intergovernmental institutions; but much valuable work could be done examining the operation of Ministerial and bureaucratic federal institutions, to see if they are operating in accordance with the principles set forth in this report. The issue of technological links between governments also remains to be addressed. The Committee is confident that Victoria will continue its commitment to Australian federal reform, and is pleased to have made its contribution to this process.