Bob McMullan (Fraser, Australian Labor Party, Shadow Minister for Federal/State Relations) Share this | Link to this | Hansard source

Everyone in this parliament knows that in 2007 we are facing what looks like a very tight election. I am not going to talk about that. We are also going to face a once in a generation opportunity to transform our federation. The question I want to deal with tonight is: will the Prime Minister use this crucial 18-month period during which no state or territory election is due to fundamentally reform the operations of the federation to save the $9 billion which the Business Council of Australia says the current mismanagement of federal-state relations is costing the economy each year?

The recognition that reform of federal-state relations is the key to the new round of economic and social reform we need over the next decade is spreading. For those of us who can see it, it is a source of constant amazement that the Prime Minister does not seem to have caught up with this new wave of reforms. This could be a once in a generation opportunity to get it right. If we miss it now, it will not be here in three years time. Meanwhile, some opportunities will have been missed or botched, others will have fallen even further behind and, for some, it will just be too late. The reason this is a special opportunity is essentially that we have a Leader of the Opposition with the experience and the will to act, eight state and territory governments with a rare degree of willingness to respond to reasonable proposals, no state election due for 18 months, advocacy from leaders of the business community for change, the impact of the High Court decision on Work Choices, a growing body of domestic and international academic and bureaucratic reports on the strengths and weaknesses of federalism, and enhanced recognition among Australians that the quality of the services they receive from government is affected by the blame game.

The case for reform on the economic front has been made by the Business Council of Australia, amongst many others. The President of the Business Council of Australia, Michael Chaney, has argued that federal-state relations provide the next big opportunity for a wave of productivity to secure Australia’s future economic prosperity. The case for reform on the social front has also been made extensively on many occasions, including in the unanimous report of the bipartisan House of Representatives Standing Committee on Health and Ageing, which recognised that the community has made it clear that it expects the Commonwealth and states to stop blaming each other for shortcomings in the health system.

Warnings on the economic and social impact if we fail to address these reform opportunities are too great to ignore or even to defer for three years. The economic implications of a failure to get our education performance up to international best practice are already being felt, disguised only by the resources boom. The economic cost of the distortions and duplications arising from the failure to restructure the architecture of our federation has been independently assessed at $9 billion. We cannot allow this to go on year after year. It may already be too late to stop the impact of climate change. We have wasted 10 years; we cannot afford to waste three more getting coordinated action in place. The planets are aligned like never before to bring about reform of our federation, and they may not be so in three years or six years or any other time in the foreseeable future.

The states are increasingly showing signs of willingness to work together to achieve what reforms they can through harmonisation. I am cautiously optimistic that we might see signs of some progress on the harmonisation of payroll tax administration in the very near future. Movement on this front will bring significant benefits to businesses large and small, and to the economy as a whole. This is just a signpost on the road to major cooperative regulatory reform. We will not be able to make more substantial progress without leadership from a federal government that actually believes in cooperative federalism.

We are poised at a crucial point. In this place, we all get caught up with the day-to-day electoral issues; I am no different from everybody else. We all do that, and we have to; we do not survive without it. But from time to time we have to lift our eyes to the horizon and say, ‘There are big issues confronting our country and reform opportunities that may not come again: a once in a generation window of opportunity to reform our federation.’ State governments are willing to participate and are starting to work together to achieve that. Of the business community calling for reform, the Business Council of Australia are the most outspoken, but the Victorian Employers Chamber of Commerce and Industry came to see me the other day with the same argument. The Australian Industry Group are also calling for reform. Business sees it, state governments see it and the opposition see it; we desperately need a government that can see it. It seems particularly clear that a government led by the current Prime Minister, Mr Howard, will never see it. (Time expired)