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Chapter 8: The role of the States in the Australian federation

• The role of the States in other federations
  • Canada and the United States of America
  • Germany
  • Belgium
  • Scotland and Wales
• The representative roles of Australian governments
  • State autonomy
  • Policy making in the national interest
  • National policy and national administration
• Endnotes

8.0 The Committee’s Terms of Reference require the Committee

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. . .

2. Identify areas of responsibility for which the State should have an enhanced role for the benefit of the Federation

The role of the States in other federations

8.2 The role of States in the federation is thus a complex one and, as observed in this report, finds expression in a variety of ways in different federal systems.

Canada and the United States of America

Germany

Belgium

Scotland and Wales

The representative roles of Australian governments

State autonomy

8.9 This principle ought to be applied even where it can be envisaged that the same decision will be reached in more than one State. The fact that distinct State decisions will produce uniform outcomes does not justify the imposition of a uniform decision-making process in place of independent State decision-making processes.

8.10 For example, after considering the respective needs of their communities, two State Governments might adopt similar or identical policies for determining where schools ought to be located. The fact that the same decision has been made does not mean that the decision ought to be determined on a uniform basis across those States. The location of schools in a community must be responsive to the demands of demography and the possibilities of infrastructure. The existence of similar or identical demands and possibilities in more than one State does not mean that each State Government should not be free to make its own decision, based on its own assessment of its State’s circumstance.

8.11 Making policy decisions for the whole of Australia only becomes appropriate when there is a national imperative that overrides interests that are local to each State.

Recommendation 2:

Recognising the powers granted by State Constitutions and the Australian Constitution, the Committee recommends that the States be free to make their own policy decisions unless there is an overriding national imperative for a single policy for the whole of Australia.

Policy making in the national interest

Recommendation 3:

The Committee recommends that national policy decisions be made in a way which maximises the possibility of interests within States being:

• represented in the decision-making process; and
  

• satisfied by the decisions reached.

This requires the participation of State Governments to represent those interests particular to their States.

8.13 In some cases national policy will be necessary in policy areas in which there is no distinct national interest, other than an interest in the convenience and efficiency of uniform policy (an example might be certain areas of criminal law). In these cases, settling on a national policy approach will be predominantly a matter of balancing the various State interests which determined each State’s policies, and national policy making ought to be pursued by the States co-operating independently of the Commonwealth. Recommendation 4 emphasises the capacity of the States jointly to make policy for the nation as a whole.

8.14 In jointly pursuing national policy, States may decide to pursue one of two courses: uniform legislation adopted in each jurisdiction or mutual recognition.

8.15 The intergovernmental negotiations that produce uniformity give each State the opportunity to shape the national standards in accordance with interests particular to its own State. The result will typically be a compromise between the existing policies of each State.

8.16 When the policy in question deals with regulatory standards, it is possible instead to adopt a framework of mutual recognition, under which each jurisdiction sets its own standards, while recognising as adequate the standards of other jurisdictions. While mutual recognition allows each State to continue to pursue its own standards, each is also obliged to recognise the standards of other jurisdictions, however far they are from that State’s own standards.

Recommendation 4:

Where there is an overriding imperative for national policy making, but there is no distinct national interest, other than an interest in the convenience and efficiency of uniform policy, the Committee recommends that the decision be made jointly by the States.

8.17 Recommendations 5 and 6 recognise that the need for State policy and legislative integrity means that the States have an active role to play in the development of policy in the national interest. They also recognise that the Commonwealth will play a central role.

8.18 There will be certain policy matters in which no distinct State interests exist. It is appropriate that the Commonwealth alone be responsible for determining policy where these matters are concerned (an example might be certain areas of defence policy and foreign affairs), and mutual respect for decision-making demands that the States recognise the role of the Commonwealth to make these decisions in the national interest. In these cases, national policy will typically be implemented by Commonwealth legislation.

Recommendation 5:

The Committee recommends that the States participate in national policy making unless no distinct State interests exist in the policy area. In those few policy areas in which there are no distinct State interests, the Commonwealth alone should have responsibility for national policy making.

8.19 National decision-making in other cases ought to be by way of co-operation between the Commonwealth and the States. By participating in the decision-making process, State Governments can represent, and balance against the national interest, those interests particular to their States.

Recommendation 6:

Where an overriding imperative makes it necessary to make a national policy decision, and where there are relevant differences of State interest, as well as a distinct national interest, the Committee recommends that the States and the Commonwealth should make the policy decision co-operatively.

National policy and national administration

8.21 A need for nationally uniform administration will arise only when it is essential to the purpose of a policy. This will most frequently be the case when a significant reason for making a national policy decision is the inefficiency or inconvenience of separate State policies (for example, because a number of individuals or organisations must deal on a regular basis with multiple States).

8.22 As it is possible to have a national policy administered by the States, so it is possible to have distinct State policies administered by a single administrative agency. In policy areas where there is an overriding imperative for a nationally uniform system of administration, it may therefore still be possible for each State to pursue its own policy. For example, in Canada the income tax of each Province (except for Québec), which is set by that Province as a proportion of the basic federal income tax,⁵ is collected for that Province by the federal tax collection department, Revenue Canada. The provinces are able to pursue divergent income tax policies, without taxpayers suffering the inconvenience of having to file a separate provincial and federal income tax return.

Recommendation 7:

The Committee recommends that the administration of policy, as well as responsibility for determining policy, be distributed between the State and Commonwealth Governments so as to uphold the virtues of federalism.

Recommendation 8:

The Committee recommends that, where there is an overriding imperative for national policy making, but a nationally uniform system of administration or implementation is not essential to the policy, then responsibility for implementing the national policy ought to reside with distinct State administrations, responsive to State interests.

Recommendation 9:

The Committee recommends that, in cases where there exists an overriding imperative for a national uniform system of administration in a policy area, but there is no overriding imperative for national policy, then where feasible provision ought to be made for a single administrative agency to implement the distinct policies of the various States.

Endnotes

1See Observations 4, 5, 7, 9 above.

2See Observations 10, 12, 16, 17 above.

3See Observation 19 above.

4See Observation 22 above.

5Tax Policy Branch, Ministry of Finance and Corporate Relations, British Columbia, Tax Collection Agreement: British Columbia/Canada, Paper prepared for the Parliamentary Federal-State Relations Committee of the State of Victoria, Australia, June 15^th 1998.