The Australian Federal Government has broken its constitutional bounds and is actively coveting the States responsibilities. The recent election campaign put the states on notice that the Liberal Government was going to take over education while the Labor health policy took health funding and administration from the States.

The basis for a Federation is that the power resides in the States with the small area of common interest being ceded to a Federal Government. These are normally nothing more than defence, international trade, inter-state trade, border control and immigration. In the 21st Century, the Australian Federal Government has crashed through these limited responsibilities.

The Federal Government has done this through taxing for the states and consequently controlling their funding. Coupled with that has been the meekness of the States and the inherent structural flaw in the Westminster in its inability to combat entropy of power to the centre.

Dissolve The States

The anti-federalist meme has sufficiently implanted itself into the polity that most major parties openly talk about removing the states as regional government and having all state responsibilities transferred to Canberra. The Democrats and Greens both have this as a stated policy goal on their websites.

John Howard in an interview in 2003 mentioned that if Australia was done again, then it wouldn't include the states. Currently all state governments are Labor, rather than his Liberal government, it may have been politics talking but Howard's education policy in the 2004 election allowed Parent and Teacher Organizations to bypass the States and appeal directly to Canberra for funding.

The Labor Party was no better, their health policy having won the acceptance of the states for the federal government's take over of that responsibility ;

Federal Labor has won endorsement from all state and territory governments for the takeover, which is likely to be seen as a trial run for a total takeover of health by the Commonwealth.

This notion has gone beyond the political parties and been accepted by the general population. A post-election letter to the editor in the Sydney Morning Herald contained these words;

The best reform both major parties could now work towards is the abolition of state governments. The efficiencies generated could massively improve all the hospitals, schools, water supply and public transport infrastructure where the current state administrations have long proved themselves spectacular failures.

William S Lloyd, Denistone, October 10.

The Federal Government has effectively coveted and controlled the States and their funding sufficiently for this "dissolve the states" meme to have been planted firmly in the population.

Taxatious Government

Previous to the John Curtin government in World War II, the States used to have income tax rolls and raise their revenue as they need through that. Part of the battle between the federal Lyons government and NSW Lang government was over the income tax rolls which Lang had hidden from the federal government.

With World War II the Curtin government created legislation that gave the federal government the first bite of the income tax pie. The constitutionality of this legislation was challenged by South Australia and Western Australia, but the High Court upheld Curtin's grab. This meant the federal government could become the primary recipient of income tax, making it politically impossible for the states to tax income.

This led to the federal government taxing for the states, an abominable thought in government. A government is only supposed to tax to maintain itself, it is not supposed to tax so much that it hands out the extra tax to the six states and two territories. This is completely anti-federalist.

GST

The Howard Government changed the system from government grants to the States from the federal governments income tax gathering to the GST. This is a nation wide 10% levy on all goods and services. The 2003 federal budget actually bragged how the Liberal Government had brought in more tax money that ever for the States. Once again, a government is only supposed to tax for "just" what it needs and no more. After that, it becomes theft from the individuals.

One of the main issues with the federal government granting money or collecting money for the states is the number of strings that it comes attached with. The Federal Government through its control of the purse and the flow of revenue can quietly manipulate where the money is to go to, punishing the states and programs that disagree with it.

The collecting of revenue for the states also helps in making them see superfluous and insignificant. If the federal government is "propping" them up by handing them tax money, then they can be construed as a drain on the federal government, rather than the federal government making naked power grabs for the states responsibilies.

Under Australia's current anti-federalist system, the federal government is open in its power plays for the states responsibilities with the obvious (and stated goal) being to centre all legislative power in the federal government. If this was part of a Swiss like Canton system it may be acceptable, but it is more like the English system where there is one big massive honking federal government in London and nothing else as a barrier to the overt centrism of the British system.

The Weakness of the Westminster System

The Westminster system is a political hack, it is a patch to a monarchical system that centres absolute power in the monarch. To get around this political reality of British heritage, the British politicians of the 1700's began to route power around the monarch through an Executive embedded in the Legislative arm of government.

While this was an improvement over the absolute power of a monarch dominated parliamentary system, it left a lot to be desired in the very necessary separation of powers (that even Joh Bjelke-Peterson failed to understand). The Washington system which was developed in the late part of the 18thC contained a far better understanding and constitutionally mandated separation of powers, placing the Executive outside of the legislative and under the revue of the legislative.

The British system contains London, and more recently the Scottish parliament, but below that national government is the local councils. Britain has no notion of federalism as it pertains to colonies, states or provinces allowing a small subset of their powers and responsibilities to be maintained by a federal government. The Westminster system was created in this environment.

By contrast the Washington system was created with the reality that the power lay with the States, and ratifying the confederation of the then colonies in the United States was not an easy manner. Many smaller and southern states opposed such a union as they saw their power and authority being subject to the potential tyranny of a federal government.

Even with the grafting of a popularly elected Senate on the Westminster system by the "Bearded Men" in 1901, the Australian Wash-minster system is more Westminster than Washington and contains all the problems of no separation of power between the Executive and Legislative. This leads to an increased rate of entropy and pressure placed on the conventions by the ongoing stress placed on the systems by governments seeking absolute power.

The Westminster is not strong enough a system to stop this rot and consequently the States it seems will eventually be consumed by the federal desire for the states responsibilities.

Government power is decided by money. The ability to collect money as well as hand it out. The Australian federal government is a big collector of tax money, in 2000 consuming 26% of Australia's GDP in tax. It is also a big spender of money, with 25.3% of the GDP being handed out by the federal government in 2000.

The Australian federal government has polluted our system of federalism by stealing from the States a government's autonomous right to tax for themselves. This not only leads to over-taxation but entropy of power to the central government. Canberra not only dictates policy, but funds it as well. The States are nothing more than a popularly elected bureaucracy to disburse federal funds.

Fortunately NSW never got over the fact that it didn't become "Australia", and on the western coast of the continent there are the Westralians, constantly suspicious of the t'othersiders, especially the ones in Canberra. Bob Carr and Geoff Gallop are both holding out for the moment.

If Carr and Gallop give in, they will effectively be handing over any last resistance to centralist principles. Australia will devolve into a Westminster system like Britain's where London dominates and nothing lies between Parliament and the local councils. The fact remains, the States need to take back from the Federal government their ability to tax.

The Failure of Federation

The failure of Federation was NSW's fault. The Australian constitution is devoid of enlightenment innovations such as a Bill of Rights, or an elected Executive. The "bearded men" knew of many of the flaws of the system and even tried to add in a few of their own. Griffiths for instance in one draft making the judicial arm subject to the authority of the legislature. Deakin was aware of the flawed federalism in the constitution, George Williams comments;

These can be traced back to when the Constitution came into force in 1901 when Alfred Deakin, one of Australia's first Prime Ministers, predicted that the states would find themselves "legally free, but financially bound to the chariot wheels of the Central Government".

NSW was the strongest colony of the time. It could have placed its stamp on the constitution, instead the Deakinists held sway and the flaws in the Constitution and Australian federal government continue to dog the country. The Deakinist world-view of Australia was an inefficient one. As Prime Minister he enacted, protectionism, discriminative immigration policy and centralised government. The first one took eighty years to get rid of, the second seventy years and the final we are still trying to disentangle from.

The Australian High Court has also been activist. Deciding for themselves that they, and they alone had the authority to turn the Australian Constitution into a living breathing document. The corporation's power is an example of this activism.

The Australian Constitution has proven difficult to change through the strict referendum and majority system. We lag behind the Swiss in this area of Constitutional responsiveness. Even so the static nature of Australian Constitutional change does not give the High Court the right to modify the meaning of the Constitution and federalism without public consent.

Emergency

In 1942 the federal government decided it needed more money to pursue the war against Japan and Germany. The demanded and got the ability to tax income. Previous to this the Federal Government was unable to tax income. Several states opposed the legislation, taking it to the High Court, but they lost. War is always a poor time for liberty, and political opportunists constantly use it to accrue more powers around themselves. James Madison had wise words on this subject;

In no part of the [US] constitution is more wisdom to be found, than in the clause which confides the question of war or peace to the legislature, and not to the executive department ... In war, a physical force is to be created, and it is the executive will, which is to direct it. In war, the public treasures are to be unlocked; and it s the executive hand which is to dispense them. In war, the honours and emoluments of office are to be multiplied; and it is the executive patronage under which they are to be enjoyed. It is in war, finally, that laurels are to be gathered; and it is the executive brow they are to encircle. The strongest passions and the most dangerous weaknesses of the human breast; ambition, avarice, vanity, the honourable or venial love of fame, are all in conspiracy against the desire and duty of peace.

To Madison's world-view, war and centralising power undermined the very foundations of free government. We are saying the ripples, if not the super-waves, of the collapsing of income tax power to the Federal Government today. The Australian Federal government over-taxes in order to impose its will on the states.

Cockroaches and Sandgropers

In the 1930s, the NSW Premier was Jack Lang. He was elected on a platform that included bashing the Bankers in London for being unsympathetic and out of touch with the realities of depression era Australia. Lang was fortunate he was given the perfect foil in the imperialistic arrogance of Sir Otto Neidermeyer.

NSW was still carrying loans to Britain from the First World War at higher rates of interest than they were paying to other lenders, such as the United States. Lang decided that he would default on the loans until he got better terms from the London bankers.

The problem from the Federal Government's point of view was that they had under-written those loans. If NSW defaulted, they were liable for those payments. Once again the pollution of the federal system led to conflict between the Federal Government and the States; in this case though, it nearly ended in Civil War.

The Prime Minister, Joe Lyons, decided he would take NSW's income tax rolls and do the taxing instead of NSW. But those rolls had been hidden, as had any cash NSW had in banks. Lyons was stuck, unable to get money out of NSW, and with Lang not changing his mind on defaulting. Lyons readied the Australian military to take government buildings in Sydney, while the NSW Police Force backed Lang to the hilt. Militias began forming all over NSW, some pro-commonwealth and some pro-state.

In the end the ambiguities of the Westminster system and reserve powers defused the situation. The Governor of NSW, Sir Phillip Game sacked the Lang government. It was most likely unconstitutional to do so. All it would have taken was for Lang to not recognize Game's authority and civil war would have descending. Lang said the words, "I am a free man, the bastards sacked me." There was no blood on the wattle that day.

We Secede!

The Western Australians were reluctant participants in Federation, concerned about the concentration of power in the Eastern States. When Western Australia held the referendum to join Federation, they were the last colony to do so, with the other colonies already approving their referendums.

The regional streak is strong in Western Australia, in 1933 the state voted to secede from the Commonwealth of Australia. To many Westralians, the federal government and Canberra were remote, far from them, and disconnected from the issues of the state. Several Leagues formed to promote secession of Australian unity. The Dominion League led the secession campaign.

The vote on secession was overwhelmingly in favour of seceding. The only district to vote no was the goldfields, presumably because of an influx of eastern staters in the gold-rush. Ironically the voters also removed the incumbant secessionist government from parliament and replaced it with a federalist one.

A petition was presented to Parliament in Britain, but British officials claimed they were unable to act without the Federal Government in Australia approving any secession. This left the Western Australian secessionist nowhere to go, other than a straight out repudiation of the Australian Constitution.

From the song, " Westralia Free ";

Plains of our pastures boundless,
Seas of our rainbow'd pearl,
Destiny is your breezes
Liberty's flag unfurl!
See its folds flung wide
And the challenge cried
"On to conquer ride,
"Wave o'er Westralia free!"

Land of the karri spring,
Land of the wheat and vine,
Aye to thy sons and daughters
Faith's altar and Love's shrine.
Lo! Our vows were sworn,
And the triumph born
In a nation's dawn,
"We made Westralia free."

By being ignored by Australian Federal Parliament, and politely fobbed off by the British Parliament, Western Australia was forced to seek its style of freedom within the Australian Commonwealth.

Claiming State Power Back

George Williams writes that the States may have a way through the corporations law to claw back against the federal government. The law comes up for review after five years;

There is however one area in which the Commonwealth does rely upon the states. The states have referred power to the Commonwealth to ensure that the Commonwealth has the power to enact key national laws. Without such power, the coverage of these laws would be incomplete, leading to confusion and extra cost. Recent referrals include giving the Commonwealth power over de facto relationships and terrorism offences. The referral most likely to be contentious is that by the states over corporations law.

Over 1999 and 2000 High Court decisions led to instability, problems with enforcement and a lack of confidence in the previous corporations law, which covered the creation and regulation of companies across Australia. It is generally accepted that Australia needs a national law on this topic. The states recognised this and in 2001 referred power to the Commonwealth. However, they did so in a way that will cease after five years. After that time, unless the states renew the grant of power, the uncertainty that plagued corporations law in Australia will return and business will suffer. Unfortunately for the Commonwealth, it will be seeking a further referral of this power at the same time as a new deal on GST revenues and a national industrial relations law.

The aggressor here is the Commonwealth government. It is the one that needs its wings clipped. We can start by not allowing the Federal Government to tax for the states. Ken Parish has written that Federal Government taking over initial income tax powers is reversible and could be the basis for the States taking back control of their own taxation . Parish writes;

The States should all agree to set up a Joint State Tax Office that would levy a uniform state income tax on all Australian individuals and companies. The rate should be set so that it covers all state spending needs, so that the States can afford to tell the Commonwealth to shove its GST revenue and section 96 tied grants where the sun don't shine. The Commonwealth would then be under intolerable pressure to reduce its own tax take back to the level required to fund only it own spending needs. It should be fairly easy for people to see which polity was guilty of greed and duplicity in that situation, and it wouldn't be the States.

Governments don't let other governments tax for them. A government is also only supposed to tax for its needs and nothing more. The federal government collecting income and sales tax for the states is a gross perversion of the principle of government.

The Nuclear Option

The states other than NSW and Western Australia have already given in to Costello. So the larger states like Victoria and Queensland are going to be no help in forming a power-block against the Federal Government. NSW will probably have to show some of the guts and gumption that it was incapable of in the 1880s.

Governments are addicted to, get fat, get wealthy and get powerful on tax collection. Economically NSW is the biggest state in Australia, and the tick of federal government is getting fattest on NSW's neck. The NSW 2004-2005 Budget contains revenue from;

• Taxation
  • 5,482,000,000 Stamp Duties
  • 4,696,000,000 Payroll Tax
  • 1,448,000,000 Land Tax
  • 1,243,000,000 Taxes on Motor Vehicles
  • 1,404,000,000 Gambling and Betting
  • 1,247,000,000 Other
• Commonwealth Grants
  • 9,648,000,000 GST Revenue Grants
  • ...96,000,000 GST deferral
  • ..260,000,000 National Completion Policy Payments
  • 5,944,000,000 Specific Purpose Payments
• Other
  • 1,670,000,000 Dividends
  • ..171,000,000 Licenses
  • ..114,000,000 Fees
  • ..242,000,000 Fines
  • ..300,000,000 Royalties
  • ...53,000,000 Fire Brigade Levy on Local Government
  • ...98,000,000 Other

Which comes to the totals;

• 15,520,000,000 State Taxation
• 15,760,000,000 Commonwealth Grants
• ...979,000,000 Other

NSW is only fifty percent self-sufficient, it is reliant on the Federal Government for about half of its revenue. NSW has several choices, be the federal government's lackey and subject to their every policy and political whim; or decrease the size of the state by fifty percent, making the federal government irrelevant; or the nuclear option, tell the Federal Government that NSW no longer recognizes the Federal Government's ability to tax income. Even better, that the Federal Government cannot tax in NSW at all - a reverse grant scheme.

Carr should claim that in 2006 a new taxation regime will appear in NSW. The federal government is no long able to tax in the state and to maintain the upkeep of the Commonwealth government, NSW will apportion grants to the federal government to ensure common issues such as the national defence, coast guard, customs and trade are maintained at the appropriate level.

To further poison the naked power grabs of the Federal Government the state of NSW should institute innovative taxation means, such as a flat tax of 25% for individuals and companies. This will neuter Costello's plea to NSW businesses to leave for other states. A flat tax will be far more palatable to individuals seeking to lower their tax burden.

For instance in the year 2002-2003 NSW had taxable income of;

• 128,551,645,861 Individuals
• 107,780,949,517 Companies (private and public)

Twenty-five percent flat of that income would be $59,083,148,844. Of this amount NSW only needs 15 billion or so to top up the needs of the state, the rest it can send onward as grants to the Federal Government. See how the feds like it that way around. I wonder who will be quickly crying poor?

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The Federal Government continues its hostility toward State autonomy in taxation. Costello is asking Western Australia to remove taxes it levies, and instead rely entirely on the federally collected GST for tax monies. As it is, the federal government collects nearly 90% of all tax collected in Australia. If any should be removing taxes it is the federal government.

The States should be autonomous taxing entities. Governments do not let other Government's tax for them. It removes any ability to fund independent policy. Western Australia should reject Costello's request and repeal the federal government's ability to tax through the GST and income tax.

This time Jon Stanthorpe is the one copping it . The party room's discipline extends to the State and Territory governments - even if they are labor. Huzzah for anti-federalism .

Stanthorpe's crime was to leak the draft anti-terrorism legislation, which would be more appropriately named the federal naked power-grab bill. This is the draft document [pdf warning] that was presented to the public (not leaked).

From the article;

Australian Capital Territory Chief Minister Jon Stanhope says retaliatory action has been taken by the Federal Government over his decision last week to post the draft counter-terrorism bill on his website.

Mr Stanhope says he has received an email from Prime Minister John Howard advising of the ACT's exclusion from consultation over the next draft of the bill.

My answer is; so punish the feds, deny the ACT enacting or agreeing to any part of it. Australia is a federation after all, not a unitary centrist system.

It should also be remembered that Australia has not had a terrorist attack, and that our multi-ethnic fault line is Bali, not on continental Australia. Terrorism is a foreign policy issue for Australia, not a domestic issue.

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George Williams has an op-ed in the Sydney Morning Herald warning against not only the vertical tax imbalance present in our system of government, but also the unrestrained anti-federalism. His recommendation is to have another series of constitutional conventions, as we did in 1890, toward solving the problem of federal/state authority and rejuvenating our system of government. While Williams did not state that his recommendation would be part of a Republican convention, this is what maximalist Republicans would desire. Australian Republicans are democrats too and demand good government above all. Republicans are more than aware of the weaknesses in our system of government.

Tax

The vertical tax imbalance has been a constant topic of discussion on SSR. Prior to World War II, the states collected income tax for themselves. This changed with the Curtin government taking over that role due to the exception that was the second world war. That state of exception became a state of permanence, and federal government never again dropped their collection of income tax. John Gorton went a step further and saw the federal government as the collectors of revenue and the policy makers. The state were reduced to disbursing federal funds in support of federal policy. Whitlam accelerated this process. This is the power of federal tax collection. We saw it again recently when Peter Costello demanded the states drop stamp duty charges in return for receiving GST.

Williams writes;

NSW, for example, depends on the Commonwealth for about 40 per cent of its revenue. This was predicted by Alfred Deakin, Australia's second prime minister, who said soon after Federation that the states would find themselves legally free, but financially bound to the chariot wheels of the central government.

I had a look at the NSW state budget in April last year . According to the 2004-2005 NSW budget, state taxation raised 15.52 billion dollars while GST and Commonwealth grants combined to 15.76 billion. GST revenue and deferral was 9.74 billion. So nearly half of the state money comes from the federal government. The point of federalism is that each level of government is responsible to raise revenues to meet its obligations. This is not happening in Australia - the system is broken.

Westminster

The Westminster system of government has poor separation of powers, this conspires to make the political process weak in warding off centralisation. Until recently British government was totally dominated by London, with the next layer of government being councils. They have actually federated to an extent with the addition of parliaments in Scotland and Wales. At the last Australian federal election, all the major parties and the larger third parties had explicit policies of dissolving the states and leaving nothing between the federal government and the local councils. Federalism is a forgotten political methodology in Australia.

In reality it is the federal government that should be the smallest. It should only be taking care of issues that require a response internationally, and to inhibit arbitrary punishment, political or economic, between the states. The states should be the point of greatest diversity. This strengthens the system, allowing for Australians to move between states when one state fails, and encouraging policy competition between states. It also ensures that the state governments respond to local needs. One big, fat, stinking federal government providing policy for us all is a weakness. In a systems world unitary outcomes are single points of failure and to be avoided - if not routed around as damage. Anti-federalism is not a viable policy for the public health or prosperity of the country.

Williams' proposes;

While Australia has achieved important reforms in other areas, it has a poor record of retaining the structural weaknesses in our system of government. This is especially a concern given that Australia now has one of the oldest systems of government in the world. To get this process off the ground we should, like the conventions of the 1890s, hold a summit that will focus national attention and create space for new thinking. We need to fix our federal problems and in doing so ask ourselves what should be the role of the states in the second century of our Federation.

I would add to this, if we are to fix the weaknesses in our system, including poor separation of powers, poor federalism and a weak as dishwater constitution which does not protect minorities and individuals from political discrimination, retribution and violence - then make it a constitutional convention for a republic. The Bearded Men did a second rate job in 1901, there is no reason why we should do the same in the twenty first century. Fix the whole shebang.

This requires; Small federal government which is constitutionally limited (so the High Court can't slyly increase federal powers), a bill of rights to limit legislative authority, better separation of powers between executive, legislative and judicial, improved checks and balances, and finally a republic where the people are the sole authority for the government's legitimacy and have a more active role in its upkeep, processes, outcomes and integrity.

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An excise is imposed on producers and their production, as opposed to a sales tax which is imposed on sales by retailers and wholesalers. Section 90 of the Australian Constitution grants the federal government an exclusive right to impose duties of customs, excise and export of goods. Successive High Court decisions have expanded the definition of excise beyond production to the point of sale.

In Ha vs NSW , one of the questions that was required to be answered in the defence of business franchise fees on tobacco sales was; Must local production or manufacture be a discrimen of the application of a tax answering the description of a duty of excise?

The pecuniary liability (other than the fixed fee of $10) imposed by the Act on the sellers of tobacco is calculated on the value of tobacco sold whether or not the tobacco is of Australian production or manufacture.

In fact, as the case stated shows, most tobacco sold in Australia is of local origin, only a small proportion of the value of total Australian sales being imported. But the defendants and the intervening Attorneys-General submit that, so long as the tax is imposed on the sale of tobacco generally, it cannot be said to be a tax on the production or manufacture of tobacco in Australia and therefore it cannot be said to be a duty of excise since duties of excise are taxes on local (that is, Australian) production or manufacture.

The same submission was firmly rejected by Dixon CJ in Dennis Hotels Pty Ltd v Victoria

Since the Dennis Hotels case, the definition of excise has been expanded from an imposition on production, to one of sales. The judges stated;

Once it is accepted that duties of excise are not limited to duties on production or manufacture, we think that it should be accepted that the preferable view is to regard the distinction between duties of customs and duties of excise as dependent on the step which attracts the tax: importation or exportation in the case of customs duties; production, manufacture, sale or distribution - inland taxes - in the case of excise duties.

They determined that the federal government had a monopoly on taxation up to the very point of receipt by the customer;

If there be any rock in the sea of uncertain principle, it is that a tax on a step in the production or distribution of goods to the point of receipt by the consumer is a duty of excise.

The Ha vs NSW decision barely passed with four for it, three against. The three dissenters viewed excise as a tax that could only be levied on production.

Tobacco, alcohol and petrol were three commodities that were most affected by the decision. The constitution requires that the Federal Government apply an excise tax uniformly across the states; and the states had leveraged differing taxes on franchise fees related to those commodities. Consequently we see the unusual situation such as in Queensland where petrol is subsidised y the state to overcome the uniform taxation at the federal level.

The Great Constitutional Swindle contains a quote from Brad Selway;

I suspect that most business people in Australia know the difference between an excise and a sales tax. ... Constitutional lawyers, on the other hand, cannot tell the difference between these taxes.

More Information

• Federalism Up in Smoke? The High Court Decision on State Tobacco Tax
• What is an excise duty? Ha and Hammond v NSW

The Australian History Summit was recently held by the Commonwealth Government in order to strengthen teaching of history in schools. Public schooling remains a State based responsibility so this can reasonably be viewed as an anti-federalist imposition by the federal government. However, there was some interesting comments by Paul Kelly on the Insiders which leads the question to be asked; in the current environment where governments are heavily entrenched at the federal and state levels, is the real opposition to the state governments the federal government and vice versa?

The Insiders is a politics as sport style television show, which to be quite honest normally bores me, however as an amateur historian who has produced several hundred pages of history since 1997 on the Australian Flying Corps page , as well as this site with a strong interest in Australian political and global constitutional history, I am intrigued by people's view of history in a national and public setting.

Paul Kelly commented on the history summit quickly dismissing that it was about a conservative-nationalist or anti-federalist agenda. But the fact is he casts it as a combative federal-states issue;

it's quite clear that the teaching of history and Australian history in our schools has fallen into gross disrepair; the present situation is most inadequate.

Now, if the states want to defend this, then they will have to defend what I think is a grossly inadequate situation, and the more these school curriculum are put on the bar of public opinion, the more they're analysed, then I think the more the states will be embarrassed and the more public opinion will turn against the states.

Which bunks any dismissal of the anti-federalist view. The more curious comment however was;

The reason the Commonwealth has intervened in this issue, the reason the Commonwealth wants to get involved, is because it's quite clear there is a significant problem.

And the documents make this quite clear. I think that, over time, if this debate does continue with some sort of confrontation, public opinion is likely to move behind the Commonwealth and also, the Commonwealth has got the force of intellectual argument behind it.

In a federal system the opposition to a state government that is neglecting its duties is the opposition party in the state parliament. However we are seeing the situation where the opposition to a state government is the federal government itself.

Shouldn't it be the opposition parties that are raising the issue of history being under-taught in the state schools, pointing out a deficiency in state governance?

Where are the opposition parties in the state parliaments? Why are they not doing their job? Are they unable to? Do they lack the media platform that the federal government has to shine a light on these issues?

Is this just more centralisation and anti-federalism? Yet we have seen many of the state Premiers act more as an opposition to the federal government than we have the opposition party in the federal parliament.

Is the parliamentary opposition so completely feebled by the politico-media system that they just have to wait patiently in the hope for a drover's dog election? Is this the entropy in a waitocracy?

Too many questions, and none of them bode well for the state of democracy in Australia.

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Julie Bishop made a speech on 'history' rather than education.

It is typical 'state of emergency' language which is often used to centralise and over-ride existing authority and responsibility. State of emergencies commonly use a single instance of often perceived weakness and use that to advocate taking over the whole kit and kaboodle;

The failure of State Governments to protect the interests of young Australians from trendy educational fads has led to the community turning to the Federal Government to take action.

The serious question needs to be asked whether it is time for a common model curriculum across the country. I think this is a debate that we must have. Let's open the lid on what is being taught in our schools, and how, and have a debate on what could be taught and why.

She continues;

A common model curriculum would (by virtue of being on the national stage) result in curriculum being made more accountable through greater public scrutiny at the bar of public opinion. This would result in model parents having greater confidence in what is, or is not, being taught in schools across the nation.

Bishop is arguing that history teaching is in decay and this is the excuse to take over the curriculum for all education from the states. History is far more important to conservatives than liberals as conservatives see it as an intrinsic property of the polity, nation and individual. Without history to nourish the individual they are uprooted from their society, community, nation and government.

The republican, progressive and liberal reading of history is that it is an important empirical tool but is an emergent property of society and culture rather than an intrinsic one.

Bishop's argument is weak and has little merit. It is typical of anti-federalist behaviour where it appropriates policy and regulation at the federal level, and then dictates those policies down to the states which have to fund and implement those policies. This is an unhealthy reduction of state power.

If history is in decline it can be rejuvenated at the state level. Andrew Norton has a better argument in which curriculum is completely decentralised . I would be comfortable with that. There is not only greater choice in complete decentralisation, there is also greater strength in increasing diversity.

x-posted at polemica

I am not a fan of the GST. I consider it an anti-federalist tax. I would accept it if it was funding the federal government, but since it is redistributed to the states, and not one for one, it breaks the principle of a government only raising the revenue it needs to support itself and nothing more.

Guy Barnett has a speech in the Senate Hansard on Commonwealth Grants Commission Report on state revenue sharing relativities. The language from the government is that the GST is a windfall - suggesting it comes at no cost, and Barnett, as Costello has, suggests that the states should cut their payroll taxes amongst others due to the GST windfall.

I would argue the opposite. Payroll tax, business taxes etc are some of the few means of taxation the states have direct control over. I am not suprised that they guard them jealously, considering as last time they challenged the federal government (NSW did) on excise taxes the High Court came down on the states declaring that an excise was anything short of a sales tax, and consequently the feds had authority over any excise. It should be noted that the dictionary definition of excise is a tax on local production. Which the High Court ignored.

The GST has also been an expansive federal tax, as Barnett notes:

In terms of the ongoing windfall gain, I want to make it clear that the GST windfall from 2003 to 2011 is humungous in size. In 2003-04 it was a $69.5 million windfall gain; in 2004-05, $106.1 million; in 2005-06, $102.2 million; in 2006-07, $109 million; in 2007-08, $117 million - as I have just indicated; in 2008-09, $131 million; in 2009-10, $140 million; increasing to a $152 million windfall gain in 2010-11. They are very significant numbers. So during that time the estimated GST windfall gain to the Tasmanian government is $927 million more than it would have received under the old tax system

Which sounds to me like Tasmanians are over-taxed by the federal government with GST. If sales tax was leveraged at the state level, the states would be able to move the percentage of sales tax up and down according to their needs and the local economy. With an anti-federalist national tax, there is no refinement, and instead is just a whopping great coarse tax which envelopes both the Western Australian and Northern Territory economies in with the NSW and Victorian ones.

Barnett speaks:

The state government payroll tax is a tax on jobs. This is a particularly iniquitous tax. Tasmania has been benefiting from that tax significantly. That revenue increase in the 2003-04 year to the 2006-07 year was 34.6 per cent. So they should use the GST windfall to start phasing out this anti-jobs tax, in my view. This report makes it clear that the rivers of gold are flowing deep and fast into Tasmania with GST dollars. It is up to the state government to use those dollars wisely.

Alternatively, the federal government could reduce the GST rate since it is obviously overtaxing and supplying the state governments with more funding than they need.

The federal government is going to poke their noses into the curriculum of High Schools. The public school system is run by the states. NSW, Victoria, Queensland and Western Australia should collectively tell the federal government to bugger off. It is none of their business, and the feds best stick to policy in areas that the federal government is responsible for. Anything else is bad governance.

The anti-federalism has to stop. I am resigned to the fact that if we continue with the current political trends that we will end up with the same structures as the UK has, where there is one massive gob of a government in London and then a series of small entities who are unable to rival the central government in tax revenue or policy.

The only way it can stop is for the states to become federalist and start asserting themselves forcibly. The first step should be reclaiming income tax and making themselves self-sufficient in revenue. The federal government has no business in education anyway, including university and private schooling, let alone public schools which are the domain of the states.