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The Role of Government in Australia

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The Role of Government in Australia THEAUSTRALIANCOLLABORatION A Collaboration of National Community Organisations The Role of Government in Australia An open democratic society needs a strong government Representatives (the lower house of 150 members, elected with particular characteristics. It should be neither des- from single-member constituencies). The powers of the potic nor over-bureaucratic. It should exist within a legal Queen as head of state are exercised through her repre- framework based on the rule of law and the protection of sentative, the Governor-General, who by convention acts, civil liberties. It should support civil society and its multi- except in rare circumstances, on the advice of ministers. plicity of voices and activities. It should provide the eco- In Australia, there are two major political parties, the nomic framework and the essential infrastructure for Labor Party and the Liberal Party, and several minor public and private enterprise. It should be concerned with parties, including especially the National Party and the the well-being of all citizens. It should protect the physical Greens. The party with the majority support in the House environment and it should act to alleviate the negative of Representatives forms Government, with its leader impacts of the market place on individuals, groups and becoming the Prime Minister of Australia. Ministers environment. These roles are often poorly understood appointed from the Senate and the House of Representa- and undervalued. tives form the ‘executive’ branch of government. Collective Australia’s system of government decision-making takes place in Cabinet meetings. Australia is a constitutional monarchy (albeit a monarchy Federal electoral terms are currently three years, engen- largely in name only) with a system of government based dering frequent elections. There is, however, an argument on a tradition of liberal democracy. Democracies periodi- to be made for extending electoral terms to four years, cally hold elections during which citizens vote for their which would allow greater opportunity for government preferred candidates and parties to act as their representa- policies to be implemented as well as reducing the time tives in government. In Australia, the Constitution sets devoted to campaigning. The arguments for and against out a framework under which the Australian Government four year electoral terms are outlined under The Austral- operates, determining the respective roles of parliament, ian Collaboration’s online resource ‘Democracy in government and the courts, setting out the powers and Australia’. responsibilities of the Commonwealth Government and If no party holds a majority of seats in the House of Repre- those of the State Governments, guaranteeing the protec- sentatives, a hung parliament results, and no party can tion of certain rights and freedoms, and placing constraints pass laws without gaining support from other parties or on government authority. The Commonwealth of Australia from independent members of the House. Such a situation Constitution Act 1901 also contains the important provi- arose following the 2010 federal election, at which time sion that the Constitution can be amended only through the Labor party, led by Prime Minister Gillard, was able to a referendum. retain government with the support of two Independents Under the Constitution, the legislature (the parliament) and and one Green MP. has the power to make laws, the executive (the govern- The High Court of Australia and the Federal Court of Aus- ment) has the power to implement the law and the judici- tralia variously interpret constitutional provisions and ary (the legal system) has the power to interpret the law. Commonwealth laws. The High Court acts as a final court The federal parliament comprises two popularly elected of appeal. chambers: the Senate (the upper house of 76 senators, elected on state-wide constituencies) and the House of www.australiancollaboration.com.au 1 THEAUSTRALIANCOLLABORatION Australia has a federal system within which power is political frameworks: parliaments, government, the divided between the Commonwealth and State govern- bureaucracies and courts. Governments are responsible ments. State governments in Australia have their own for such matters as law and order, infrastructure, health constitutions, legislatures, bureaucracies, courts and services and education as well. Furthermore, Australia’s police. The Constitution gives the Commonwealth powers, bureaucracy is small by international standards. such as powers relating to foreign affairs and military Thirdly, while the welfare state has been criticised for defence. The decisive Commonwealth power is the taxa- removing the economic incentives that encourage individ- tion power, which enables the Commonwealth to raise uals to strive for material wellbeing, there are certain large sums of money and to control its distribution. Recent groups of people – the infirm, aged or otherwise vulnerable High Court rulings related to the Trade and Commerce – who will never be able to reach even the minimum and Corporations powers have also greatly extended the standard of living that most Australians have come to powers of the Commonwealth. expect. The welfare system is instrumental in sustaining Criticisms of the extensiveness of these disadvantaged people at an agreed minimum stand- ard of living. Notwithstanding the acceleration of globali- government influence sation, OECD governments have recognised the importance It is fashionable in some quarters today to argue that the of maintaining welfare systems. This is illustrated by the more limited the role of the state, the greater the benefit for fact that among OECD countries, public expenditure in its citizens. This argument draws on a number of develop- Australia on social security today remains almost as high ments over the past century, and the philosophies under- a proportion of national budgets as it was in the 1990s; pinning them. The first is the experience of totalitarian furthermore, the Nordic countries (Sweden, Norway, rule in the twentieth century. The second concerns the Finland and Denmark) have successfully maintained the dramatic growth of bureaucracy over the last hundred values of the welfare state while achieving high economic years. The third concerns some disappointments associ- growth. ated with the welfare state. The fourth is the emergence Fourthly, economic rationalist policies and proposals for of economic rationalism (market fundamentalism in its a minimalist state are widely contested. Contrary to the extreme form), an economic doctrine based on the views belief of market fundamentalists, unregulated markets do of theorists and economists such as Friedrich Hayek and not offer ‘perfect competition’ among abundant rational Milton Friedman. buyers and sellers, all perfectly informed about the present Responses to these criticisms and future price and quality of the commodities on the market. Instead, it is often the case that buyers are poorly These criticisms need to be put in perspective. How do they informed and susceptible to misleading advertising. Fur- each relate to Australia’s economic and political situation? thermore, although it is undeniable that free markets offer Firstly, totalitarian rule may be a concern for Australia’s efficiency, they certainly do not ensure fair outcomes: for foreign policy, but it is not a domestic issue. this, government intervention is needed. Secondly, the growth of the bureaucracy is natural in A framework for the effective operation of the market a society in which the population is growing and the gov- economy ernment has ever-widening responsibilities. A state The market economy depends very significantly upon bureaucracy is indispensable to the administration of well-understood rules of behaviour. It needs laws such as policies and programs and indeed, under the Australian those embodied in the Corporations Act 2001 and institu- Constitution, there are some roles that only the state can tions such as the Australian Securities and Investments play; for example, the Commonwealth government is Commission (ASIC) and the Australian Competition and responsible for the country’s military forces and for its Consumer Commission (ACCA) to monitor and regulate foreign policy and foreign relationships. Governments at corporate behaviour. Without these rules of behaviour, every level are also responsible for Australia’s legal and corrupt or inappropriate practice would be more common and businesses would not know what is expected of them. www.australiancollaboration.com.au 2 THEAUSTRALIANCOLLABORatION Government has to take responsibility for the larger eco- The role of the state in raising taxes to fund infrastructure nomic framework for commerce. The state also needs to and services make corrections when the market fails to perform. The Taxation is all too frequently portrayed as a societal evil most effective drivers of economic development have been and as an unnecessary and unwelcome burden on individ- carefully judged combinations of private corporate activity uals and organisations. Taxation is, however, a prime and state supportive action such as the provision of infra- social good. Without taxation, it would be impossible to structure, investments in education and training, the provide the infrastructure and services on which all Aus- regulatory framework and the system of incentives and tralian citizens and organisations depend. Taxation is also taxation. the means whereby those who earn higher
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