2008 Processes for Reforming Australian Federalism 617 PROCESSES FOR REFORMING AUSTRALIAN FEDERALISM BRIAN GALLIGAN∗ I INTRODUCTION It used to be said of Canada in the last decades of the 20th century that it was the only country in the world where one could buy a book on federalism at the airport. That was because federalism was at the heart of intense national debates that raged over placating secessionist Quebec and accommodating the alienated and resource-rich Western Provinces, particularly Alberta, while at the same time acknowledging Ontario’s primary provincial status and supporting the weak Maritime Provinces. Federalism in Australia has never had quite that public notoriety or popular interest, due in part to the absence of such distinctive regional and cultural differences and clashes as those existing in Canada. However, the ups and downs of Australian federalism, including its successes and failures and much ‘muddling through’, have been on and off the public and scholarly radars, and periodically the national agenda for reform. Reforming Australian federalism is currently high on the national agenda due to electoral politics and globalisation, with the November 2007 federal election signalling a major change in direction. The Howard-led Liberal Coalition Government, with its anti-federalist slogan of ‘aspirational nationalism’, was soundly defeated. The Rudd Labor Opposition, which pledged to end the ‘blame game’ and reform our ‘dysfunctional’ federal system through greater co- operation with the States and Territories, was elected. While the election was not primarily about federalist issues, federal–State relations clearly played a part and were interlinked with other factors. A less dramatic component of the push for federal reform has been the ongoing pursuit of greater domestic efficiency in economic management and governance to improve global competitiveness. In the longer term, meeting the challenges associated with globalisation will likely play ∗ Professor of Political Science, School of Social and Political Sciences, University of Melbourne. I would like to thank colleagues participating in the Federalism Roundtable on 13 June 2008 for their critical comments, and the Gilbert + Tobin Centre of Public Law for hosting that event. 618 UNSW Law Journal Volume 31(2) a dominant role in the reshaping of Australian federalism, and probably in a decentralist way.1 Whether and in what respects Australian federalism is in need of reform are contentious issues over which there is dispute. Some advocate a ‘root and branch’ onslaught of wholesale restructuring, perhaps making the States largely administrative agencies of the Commonwealth. Others champion the ideal of a more co-ordinate, as distinct from concurrent, distribution of Commonwealth and State roles and responsibilities with greater, and more precisely specified, State constitutional powers. Between these two extremes are various positions ranging from major changes to minor tinkering. My purpose in this paper is not so much to evaluate the substantive merits of the various reform claims and the centralised/decentralised governance models that underpin them. Rather, I wish to explore and articulate processes for reform: how they have occurred and how they might occur. I do not consider the radical alternative, proffered surprisingly often by Australian commentators, of abolishing federalism and the States altogether in favour of a centralised or unitary system of government. That proposal would mean doing away with, rather than reforming, Australian federalism, and in my view is both unlikely and ill-considered. Somewhat more constructive proposals for strengthening regional governance or, more radically, replacing the existing States with regions, are also being proffered. Regionalism is a variant of decentralised government situated within a predominantly centralist paradigm. Hence, regionalism cannot strictly be called a variant of federalism, which entails two spheres of government with powers shared between them in such a way that neither is predominant.2 In my view, substituting regionalism for federalism is not a plausible option for Australia because the States and Territories are already well-established super-regions with distinctive geographical domains, State cultures and semi-autonomous governments. Moreover, regionalism is alive and well at the sub-State level for certain governance purposes and policy delivery regimes, and can be a preferred identifier for groupings of people concerned with or responding to certain issues. However, it remains only one of numerous identifiers and tends to be fluid and ill-defined, as Anne Twomey counters in this volume.3 Nevertheless, regionalism 1 Many Australian commentators see greater centralisation of national power as the more likely consequence of Australia’s response to globalisation. This view ignores the larger ‘paradigm shift from a world of sovereign nation-states to a world of diminished state sovereignty and increased interstate linkages of a constitutionally federal character’: Ronald L Watts, Comparing Federal Systems (2nd ed, 1999) ix. See also Harvey Lazar, Hamish Telford and Ronald L Watts (eds), The Impact of Global and Regional Integration on Federal Systems: A Comparative Analysis (2003). 2 For a classic account of federalism, see Daniel J Elazar, Exploring Federalism (1987). For an account of federalism in the Australian context, see Brian Galligan, A Federal Republic: Australia’s Constitutional System of Government (1995) 38–62. 3 Anne Twomey, ‘Regionalism – A Cure for Federal Ills?’ (2008) 31(2) University of New South Wales Law Journal 467. For the most extensive and current work on current regionalism, see A J Brown, ‘Regional Governance and Regionalism in Australia’ in Robyn Eversole and John Martin (eds), Participation and Governance in Regional Development: Global Trends in an Australian Context (2006) 17. 2008 Processes for Reforming Australian Federalism 619 is significant because, as A J Brown forcefully shows,4 it is out there, alive and well. I agree: in my view, while regionalism adds to the richness and complexity of identity, governance and policy communities in Australia, it is a sub-federal matter which is likely to remain within the interstices of the federal system. In this paper, I argue a number of propositions concerning the process of federal reform which are developed from an examination of the institutional parameters and logic of Australian federalism, references to historical examples and institutional processes for reform. Such an exercise is potentially very large, so my coverage is inevitably selective, and it is also skewed towards the political aspects of the reform process. Primarily, this is because I hope to demonstrate that the most promising avenues for reforming Australian federalism are political rather than constitutional. In this respect, my views are probably at odds with those of constitutional lawyers and others who, when they perceive a problem with Australian federalism, tend to reach for the Constitution and set about devising legal remedies. While this keeps constitutional discourse alive in a political culture that takes its constitutional heritage for granted (and is hence a noble enterprise) it is largely a waste of time. This is for two reasons that will be developed further in this article: first, constitutional change has proven an unlikely vehicle for federal change; and second, most reforms can be undertaken via sub-constitutional politics. I agree with Anne Twomey that ‘[t]he time is ripe for review of our federal system’ and that there is a need for ‘thorough consideration of constitutional reform’.5 I argue, however, that thorough consideration of the shortcomings of constitutional and judicial reform shows us that we should look mainly to politics and sub-constitutional institutional reform as the most promising avenues for reforming Australian federalism. The thrust of the article can be summarised in a series of arguments or propositions. The first is that there are multiple processes for reforming Australian federalism and that these processes are more varied and complex than is often assumed in essentialist notions of reform discourse that tend to view federalism as a static institutional or conceptual construct. The second is that the interactivity of these processes is significant in achieving, or indeed frustrating, reforms. The third is that reform processes are more developmental and incremental, rather than programmatic and discrete. The fourth is that federal reform processes – mainly political, though involving competitive and cooperative aspects – are already in place and working tolerably well. The fifth is that negative prognostications often draw upon unexamined assumptions and models of federalism that generate problems more imagined than real. The appropriate reform process for these federal problems is an academic one: more critical reflection and argument to improve our conceptual grasp of the complex governmental beast that Australian federalism truly is, and further research to establish what is really going on in a period of dynamic political federalism. 4 A J Brown, ‘In Pursuit of the “Genuine Partner”: Local Government and Federal Constitutional Reform in Australia’ (2008) 31(2) University of New South Wales Law Journal 435. 5 Anne Twomey, ‘Reforming Australian’s Federal System’ (2008) 26(1) Federal Law Review 57, 81. 620 UNSW Law Journal Volume 31(2) There are a number of conceptual issues that