From GST to gambling to gun buybacks, Australia’s federation isn’t working
Australia was built on the idea that states should compete against each other – but they’re not, and that’s failing us all.
Australia's federal system, established in 1901, has been prone to tension between the states and the federal government for decades. While the concept of "competitive federalism" encourages states to develop their own policies to compete with one another, Australia has become increasingly centralized since its inception. This centralization has led to a vertical fiscal imbalance, a situation where the federal government, which is better positioned to raise revenue, holds more power over public services than the states.
Consequently, states rely heavily on the federal government for funding, limiting their ability to create policies based on local preferences. For instance, Queensland Premier David Crisafulli is refusing to sign a national public school funding agreement to secure a more favorable deal. Meanwhile, Northern Territory Chief Minister Lia Finocchiaro is seeking a special exemption to use gas to power data centres due to the expected increase in gas production from fracking in the Beetaloo Basin.
Premier Roger Cook from Western Australia is standing firm on the complex GST distribution system, which has historically favored the state due to a 2018 deal. The Australian Centre for Federalism's recent survey found that a significant portion of Australians believe their state does not receive its fair share of federal spending, particularly residents in smaller, less populous, or remote regions.
Written by urgent.news from The Conversation AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
