JjAUSTHALIA
PRIME MINISTER
FMR PRESS 7 AUGUST 1976
ADDRESS AT THE FEDERALISM BANQUET, MELBOURNE
I am pleased to be here tonight to celebrate the 75th anniversary
of the Federal system among so many people whose lives have
been moulded in one way or another by Federalism.
These include Federal parliamentarians, State parliamentarians,
High Court Judges, Constitutional lawyers and Commonwealth and
State public servants and citizens.
Organisers have managed to bring together tonight a representative
group of those people who give life and meaning to our Federal
system. Tonight I would like to talk about the Federal system and particularly
about its relation to current Australian society, about the
Parliament, the Senate and the Crown.
The decision to establish a Federal system in Australia was
based on a number of inescapable features of the Australian
situation. The facts of geography particularly the fact of
distance between the major areas os settlement; the existence
of well-developed administrations in the colonies with their
own ways of handling local problems; the distinctive colonial/
State orientations on major policy issues and the likelihood
that without a Federal. system the densely populated regions
would not pay sufficient attention to the needs of the more
spoarsely settled regions.
AlongSide these features which imposed the need for a
constitutionally guaranteed distribution of power, there were
a number of national interests such as defence, currency,
immigration, posts, inter-colonial trade which would be most
effectively handled by a national government.
Since Federation we have had considerable success in overcoming
the tyranny of distance. Improvements in communication have
helped the formation of nationwide responses on national political
matters. Personal mobility between the capital cities and the
States is much greater. A genuine national economy was
developed on the foundation of free trade between the colonies.
Yet when all this is said, the states remain as vital realities.
Each maintains its own distinctive political tradition. Each
remains,. to a large extent, a genuine regional community, with its
own media, its own industrial interests, its own social life,
its own organisations and associations.
Since Federation there has been a great shift in power towards
the Commonwealth Government. This shift is primarily a
consequence of the fact -that the legal and financial arrangements
of the Australian federation gave the Federal Government
opportunities. Opportunities which political interest and
circumstances encouraged it to seize. Once the trend to
greater Commonwealth power was establi14shed the states in turn
found that it was politically convenient to have the.
Commonwealth raising the money that they spent. In these
circumstances there is almost an, 4nevitability in the further
tendency of the Commonwealth to direct more and more closely
the expenditure of the funds it raised.
These trends did not mean that the basis or the necessity
for an effective and proper Federal system had vanished.
They simply meant that the legal and financial arrangements
of the Federation were becoming increasingly out of
alignment with the real character and needs of Australian society.
The Australian drift towards centralism was not in tune with
developments in other modern democratic federations. Even the
-model of the unitary state Great Britain seemed to be moving
towards a more effective recognition of regions.
The drift towards centralism created its own inefficiencies
particularly in the duplication of administrative agencies
and the growth of a large central bureaucracy. Moreover,
this drift ran completely counter to the kind of society where
a real decentralisation of power is required if people's needs
are to be met in ways most sensitive to those needs.
This is not only because Australia remains a country where the
states largely reflect a genuine regionalism. The need for
devolution of power is all the greater because of increased
education, some of the changes taking place in public attitudes,
and in political skills and awareness. There is a widespread
call these days for all our institutions to be more responsive
for those affected by decision to be able to participate effectively
in the process leading to decision.
A wider distribution of governmental power is surely the
way to respond . to these needs and criticisms. Governments'
capacity to accurately assess problems and to take into account
people's judgement of their own needs is essential to effective
social reform. There are mrany' important_ areas of Government
action where a uniform national approach is the least
appropriate way of meeting needs.
But so long as state and local-government lack an adequate financial
autonomy, there is a standing temptation for Commonwealth
politicians to inappropriately impose their views in areas
where local decisions would be more appropriate.
A reasonable degree of financail autonomy is a guarantee that the
distribution of government power envisaged in the federal model
remains a reality.
one-. of the enormous merits of a properly operating
Federal system is that in the longer run it should contribute
significantly to the quality of Australian government.
It is for these reasons that the present Commonwealth Government
has initiated the most far-reaching reform of the federal
arrangements since Federation. We believe that effective
government requires Commonwealth,. State and local governments to
take decisions appropriate to their own spheres, with matters
properly concerning more than one government being decided by
genuine consulta. tion and cooperation.
The main features of our reforms are readily summarised:
state and local governments will be given a substantial degree
of budgetary independence through access to a percentage of
personal invome tax revenue. We propose that each state will have
the discretion to impose a surcharge or allow a rebate
on the total personal income tax of that state. We
believe that national objectives and reforms can be more fully
achieved with a more selective use of specified purpose grants
and without heavy-handed interference and duplication of
functions.
As a result of the changes we have introduced the states general
revenue grants have been increased in 1976-77 by over 20% it
is for the states to decide their priorities in spending the money.
The choice for instance between an enlarged public service
or welfare housing is in their hands.
To date the implementation of our federalism policy has, of necessity,
emphasised financial arrangements. Other aspects of our
federalism policy include the establishment o-Z: an -Adv;-sory Council
for Inter-government Relations which will bring together
Federal, State and local government representatives and private
citizens to consider common problems and consider the definition
and rationalisation of functions.
The far greater financial autonomy our reforms will give to the
States and local government will make these governments much more
significant as local points for popular demands.
The federalism reforms create the opportunity for more effective
responses at State and local levels. Taking up these new opportunities
depends on the people themselves the extent to which they want,
and are prepared to work towards, the governmental system which
will most effectively meet their needs.
There are a number of people who don't like our Federalism proposals.
They are usually people who think they know what is best for others
and who want to impose conformity on Australia.
Federalism does not provide an attractive way of organising the
power of government for those who think they have all the answers
to the problems of their fellow citizens.
Federalism implicitly rejects the view that there is one
right solution for all circumstances, for all communities.
The belief that a few people know how to solve all our problans
and that they are justified in drastically truncating the
capacities of other individuals and communities to achieve their
goals is a dangerous one.
Our founding fathers recognised this and created an institutional
system in which the diversity required for the effective
development of Australia would be protected. They divided
powers between the Commonwealth and State Governments. They
established a High Court to adjudicate on constitutional issues
brought before it, and they divided the Federal Parliament into
two houses, achieving a deliberate division of power to balance
population and states.
They wanted the Senate to be strong and effective and gave it
equal power with the House of Representatives in all matters
excepting money bills. In the case of money bills they gave the
Senate the power to defer or reject supply. This power was
recognised in'the Constitu~ ton itself by a deliberate act of choicewithout
it, there would have been no Federation.
The late Sir Kenneth Bailey in his introduction to Evatt's
" The King and His Dominion Governors" draws attention to the
significant fact that the relationship between the two houses of
the Commonwealth Parliament have not been left to convention but
" have been defined and expressed in the form of law".
Whatever some may say about the justification for giving the
Senate this power, it is bestowed on the Senate by the Constitution.
Constitutional consequence of either House refusing to pass supply
is identical.
In both cases the Government must go to the people. A Government
that tries to rule without the Senate's approval for its expenditures
is trying to rule without Parliament. To suggest that the
Senate's restrained use of its constitutional power to withhold
supply somehow establishes a convention more powerful than the
provisions of the Constitution is, I believe, nonsense.
The Senate's power exists in the Constitution, and has been
acknowledged by a wide range of authorities. The use of the
Senate's power is not a breach of convention but a demonstration
o f-the seriousness of the circumstances it seeks to remedyv.
It should also be noted that the analogies some have attempted
to draw bet--ween the position of the Senate and that of the House
of Lords are totally without foundation. Great Britain relies
more on convention while Australia has a written Constitution-
Great Britain is a unitary system, Australia is a Federation
in which the States have particular rights and powers. The Members
of the House of Lords are either hereditary or appointed. The
Members of the Senate are democratically elected it too is
a people's house.
To suggest that conventions and practices developed in Britain
can override our own written Constitution is specious and
has no grounding in either law or logic. The Constitution also
imposes great and at times onerous obligations on the Governor
General's office.
With their commitments to the basic concepts of Parliamentary
government, it would have been inconceivable to the founding
fathers that a Government might ignore the cardinal Parliamentary
convention that a government unable to pass supply through the
Parliament must go to an election. The blunt fact is a fact
on which Parliamentary supremacy over the Executive has always
been founded that a government without money cannot rule.
Money is the life blood of government without it, a government
will die.
If governments who cannot secure supply were to attempt to stay
in office, government and Parliament would become unworkable
and the country paralysed. Normally this would not happen.
The Prime Minister of the day would advise the Governor General
-that someone else should be appointed or that an election be called.
If the Prime Minister of the day is not prepared to recommend either
of these courses of action, the Governor General is forced as a
last resort to use his power under the Constitution.
In all normal circumstances the Governor General must accept the
advice of his Prime Minister and Ministers. However, in
exceptional circumstances when either one of the Houses of
Parliament has deferred or rejected supply and when the Prime
Minister despite this tries to stay in office, the Governor General
is forced to act.
In these exceptional circumstances, the. Governor General can
only meet his Constitutional obligations which are there for
the benefit of the people by establishing the conditions
in which an election will be held, and the people's will determined.
The only alternative would be an appropriate constitutional device
which would secure an automatic election if Parliament denied
supply. I hope nobody will support the contention that Parliament ought
not to maintain control over the supply of money to the Executive.
It was an attempt to achieve just this that compelled the Governor
General to act as he did.
We should spare a moment to think'of the difficulty of the decision
which the Governor General was forced to make. It should also be
noted that the Governor General did not put himself in the position.
He was placed in it by his Government. In these circumstances
the Governor General has a right to expect from others
particularly his advisers reasonable and rational discussions of
the constitutional issues, free from all threats or sanction or
dismissal. That as we know, was not the case.
A servant of the Constitution who discharges his constitutional
obligations in a situation fraught with the greatest difficulties
is worthy of the highest regard.
Through the 75 years of our Federation, there have been
some shifts in the balance and division of power. Those of
a Liberal philosophical persuasion believe that there should
be a maximum devolution of power to the public they are
increasingly well educated, critical and concerned with politics.
In achieving devolution and fostering participation we will get
a greater awareness of what Government can or cannot do.
Encouraging the maximumn effective participation by people in the
political process fosters a realistic appreciation of the limits
and possibilities of government action.
Federalism makes possible the most effective devolution of power,
the most effective responses by government to peoples' needs,
and develops the competence and understanding of the citizens
on which democracy always depends. 000oo000