Economic crisis reopens federalism debate

By Angela Dorizas

The global financial crisis has reinvigorated the federalism debate, according to Stephen Loosely.

The former Senator for New South Wales and ALP National President said the relationship between the three spheres of government is likely to evolve in the changing global environment.

“If Australia is to remain an effective player in shaping international policy legislation it must be seen, globally, as a robust and unified entity,” Loosely said.

“This results from having a clear blueprint for Commonwealth and state relations and an understanding of the role each tier of government plays at both a policy and delivery level.”

He said there had been a trend towards issues being resolved nationally, particularly in the areas of terrorism prevention and changes to industrial laws. This expansion of federal powers in policy areas “once regarded as solely the province of state and territory governments” reflected the shifting political landscape, he added.

Loosely said current Commonwealth-state relations differed greatly from what existed at the time of Federation, when the states were “dominant political players”.

“The gradual shift of power does not mean the states will become obsolete,” he said.

“On the contrary, the states play a critical service delivery role in managing the day to day affairs of the community. It would be inconceivable for the Commonwealth to ever absorb all these responsibilities.”

He said overtime the states were likely to become the “vehicles of service delivery” in health, education, transport and policing, but the Commonwealth would set policy objectives more broadly and tackle the larger issues of restructuring “fragmented national frameworks”.

Stephen Loosely is a special counsel in Minster Ellison’s Government Group and current chair of the Committee for Sydney and the Australian Strategic Policy Institute in Canberra. His article, ‘Changing Face of Government’, is featured in this month’s issue of Government News magazine.

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