I write this column knowing full well that Australia’s federalist system is broken. Sure, we have the outward trappings of federalism: the six separate states, each with its own elected government; a written constitution that copied more from America’s Madisonian set-up than any other country’s on earth, including the US version of ‘one-list of heads of powers’ federalism rather than Canada’s ‘two-list’ system; the thoroughly federalist mandate that each state, regardless of its population, will send the same number of senators to the upper house (because, again, we copied the US); an amending formula that has two requirements, the second a purely federalist one. All that is true. The problem is that since a big case in 1920 the High Court of Australia, together with uber-centralising Commonwealth governments, has progressively taken away state powers and handed them to the centre, to Canberra. And let me be blunt, the interpretive approach adopted by our High Court to decide federalism matters is laughable. It ignores the clear intent of the founders and ratifiers – documented and undeniable – and opts to focus solely on the ‘one-list’ powers handed to the centre and then interpret those in a wide, expansive, sweeping way.
The result is that Australia is the only federalist country in the democratic world whose states (for all practical and non-theoretical purposes) do not have income tax power and so lack the accountability that comes with having to raise what you spend. We have the world’s worst vertical fiscal imbalance – which is jargon for the notion that the centre here raises almost all the money, far more than it needs, while the states raise comparatively nothing (their avenues to do so having been closed off by the High Court). And so the states are beggars, who take money from the centre for such important matters as health and education on the basis they do what they’re told, and often on a distribution basis that is so insanely and single-mindedly focused on ‘equal outcomes for all states’ that Marx and Engels would be embarrassed by it.
Now this history means that this native-born Canadian was mightily surprised to arrive in Australia in 2005 to find most Australians are instinctive centralists. They want ‘one-size-fits-all’ outcomes. They see the states as annoyances that duplicate civil servants and house third-rate politicians. They seem to have few federalist bones in their bodies. Meanwhile most Canadians and Americans are instinctive federalists. They understand that federalism works – it only works – through competition, not trite genuflections in the direction of ‘cooperation’. They want ten Canadian school curricula or 50 US ones, because the odds of the central government and its bureaucrats actually drafting a good school curriculum are way below 50-50 (an instinct wholly and completely born out here in Australia after the Howard government delivered a pretty woeful national curriculum). They know that federalism satisfies more citizens’ preferences than centralised ‘one-size-fits-all-ism’ because decisions are made more locally. And the empirical data favours the federalists. Democracies that have real federalism (think Germany, Canada, the US) are notably richer than unitary set-ups (including Australia’s gutted version of ‘federalism-largely-in-name-only’). Federal systems, counter-intuitively for Australians, even have fewer civil servants per capita.
The rot started back in 1920 but was made much worse in during the second world war when income tax powers were taken from the states on an interpretively dubious basis that was upheld after the war as well. Then there was the 1983 Tasmanian Dam Case that allowed the centre, the Commonwealth government, to over-rule a state based on the s. 51 external affairs power – so: 1) Canberra enters into a treaty on a topic and (with a few peripheral qualifications) 2) the powers are theirs. If that’s honest interpretation then I’m a leprechaun. And don’t forget John Howard’s terrible Work Choices mistake, when he controlled the Senate, of trying to get labour relations powers taken from the states on an interpretive theory that ignored two failed s.128 referenda trying to give it to the centre and no plausible head of power to point to. The High Court, as they virtually always do, played ball and held for the centre. And of course, as was plain to any instinctive federalist, when Labor came in they used this central power they’d been longing after for nearly a century to take labour relations in this country way back and far more sclerotic and productivity-sapping than they’d ever been under the states.
That’s just a quick sketch. But federalism in this country is a bit like some Potemkin village, with the formal trappings of federalism but without the benefits of competition, experimentation by states and difference that drives better outcomes. Which is why this past weekend I just spent in Perth attending this year’s Samuel Griffith Society (‘SGS’) conference was so wonderful. This organisation is explicitly dedicated to upholding the Australian constitution, which was intended to be a federalist one. (And if you want to see the implausibility of the interpretive approach used to gut federalism in this country, imagine you and your spouse decided to split up all the domestic chores. She says, ‘I’ll do these five specifically written down tasks and you do everything else.’ Our High Court has over time interpreted that to mean she does near on everything.)
But go to an SGS conference and you’ll meet non-lawyers and lawyers largely of like mind. This year we had two current as well as two former High Court Justices who spoke. We had top barristers speak. We had nearly one hundred young students, none of whom at uni hear anything like the views at this conference – such is the monolithic orthodoxy in today’s Australian universities all under the woeful sway of diversity, equity and inclusion. As Steven Pinker, a left-leaning US academic who loathes DEI almost as much as I do, likes to quote, ‘Just as the Holy Roman Empire was neither holy, Roman nor an empire, DEI delivers a total lack of intellectual diversity, ensures some groups are treated completely unequally to others, and sees all sorts of people are excluded from all sorts of things because they’re in the wrong groups.’ DEI is a worse variant of affirmative action that pretends to care a bit about merit but doesn’t in the least. And the academics it produces have 95-to-5 views on the Voice (‘yes’), federalism (‘no, we’re centralists’), decolonising the curriculum (‘yes, please’), anything the transgender lobby wants (‘you bet’) and so on.
But not at the SGS. We are fighting for what remains of federalism. We are committed to pointing out the current High Court’s judicial activism and its increasing usurpation of democratic decision-making (under the judicially created implied freedom power and also the steroidally supercharged separation of powers doctrine, also discovered by the judges many decades after Federation).
The SGS is a great organisation. Join and you’ll feel a bit like a Christian in second-century Rome. Better yet, make a point of coming to next year’s conference. We at the SGS welcome everyone equally. No acknowledgements of country. No concern with identity politics. A strong commitment to democratic decision-making rather than legislating from the bench. And a helluva a good time each night at the bar.
Got something to add? Join the discussion and comment below.
You might disagree with half of it, but you’ll enjoy reading all of it. Try your first month for free, then just $2 a week for the remainder of your first year.






