Federation revamp needed to realise Australia’s regional potential.*

In the number, power and size of the existing states, the Australian federation is structurally flawed, impeding decentralisation and regional development beyond the cities.

Go anywhere in Australia and you will find local mayors spruiking up their part of the country while bemoaning frustrations with other levels of government about funding and approvals.

The level of government closest to the ground has such limited revenue-raising powers it impacts negatively on regional initiative and development. 

In 2020-21, Australia’s 537 local authorities raised a mere $20 billion in rates or less than half what they spent on essential services and infrastructure.

The third tier of government has long argued it should be included in the Australian Constitution – and twice that call has been rejected by the people.

As creations of their respective State Governments, they are barking up the wrong reform tree in seeking an uncertain constitutional bypass to federal funding.

The real impediment holding back development in the 55% of local governments (LGAs) in regional and remote Australia is the very structure of the federation itself.

In 1897 federation founder Edmund Barton foresaw “a nation for a continent and a continent for a nation”, but he underestimated how nineteenth century colonial boundaries would restrict a national vision while reinforcing population and political imbalances between city and country, east and west, and north and south.

Beyond the metro conurbations, today’s federal shape and number aligns poorly with the realities, needs and potential of the dozen plus major regional economies that are essentially serviced by fly-in-fly-out state and federal governments and whose exports underpin the national accounts.

Two in three Australians live in capital cities and usually see the regions only when they fly over.

Of the 151 members of the House of Representatives, more than 60 are from Sydney, Melbourne, and Brisbane.

The northern half of Barton’s continent-nation has just 7 representatives in the people’s chamber in Canberra.

A challenging but not impossible idea in the years ahead would be the creation of several new regional states enjoying the sovereignty of the existing ‘Club of 6’.

Expanding the federation would stimulate population growth, economic development, and defence security in northern Australia and result in more effective states elsewhere.

This will never happen without regional Australians leading and voting for the argument, demonstrating the benefits of a federation revamped around regional economies especially in the north and west.

Federal renewal will take time, but not to attempt it means forsaking Barton’s vision and the aspirations of many hard-working regional Australians deserving fairer sharing of the nation’s bounty.

*A version of this article first appeared in “View from the Paddock” in The Queensland Country Life newspaper p 23 Thursday 23 March 2023 as “The conversation regions need Aus to have”.

Note: The map of Regional Development Australia’s regional development committees (or RDAs) reflects the rich diversity of regional economies across Australia. It can be accessed at https://www.rda.gov.au/my-rda An optimal Australian federation would probably be framed on somewhere between 8 and 12 states.

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