COAG: failing, overburdened and dysfunctional, but the best we have

Is COAG a failing, overburdened, dysfunctional farce? Adelaide Law School PhD Candidate Mark Bruerton explores its purpose and operation in our federation.

Last Friday, we witnessed the regular pilgrimage of state and territory leaders to meet with the Prime Minister in the Council of Australian Governments (COAG). This ritual, despite being one which has been part of Australian governance since the beginnings of the federation, is one which has always attracted criticism of its worth and this time was no exception. Queensland Premier Campbell Newman again attacked the process as a ‘dysfunctional farce’ that should be abandoned. Tony Shepherd of the Business Council of Australia argued COAG has ‘failed’ to achieve a fairer distribution of revenue between the Commonwealth and the States and Territories and should be reverted to an earlier state of limited premiers’ conferences and stronger ministerial councils.  Stephen Bartos has argued the process is overburdened and should be reformed. While each of these people makes credible points about the problems with the COAG process, they blame this on structural flaws in COAG, when in fact the problem is much deeper. If we as a nation are to solve the problems Newman, Shepherd and Bartos allude to, we need to look at the structure and distribution of responsibilities within the federation.

Initially, let’s examine why COAG exists. We have a federal system in Australia where the vast bulk of policy can be regulated either by the States and Territories or by the Commonwealth. States have the power under their constitutions to legislate on any issue. The Commonwealth has limited legislative powers under sections 51 and 52 of the Australian Constitution and full legislative powers in the territories which are exercised, by virtue of legislation, by the Territory governments. What this means is that the States, the Territories and the Commonwealth all have overlapping constitutional powers to legislate in the vast bulk of policy areas. Section 109 of the Australian Constitution resolves conflict between Commonwealth and State law (in the Commonwealth’s favour), but the distribution of policy responsibilities is left for the various Australian governments to decide for themselves. Furthermore, in the absence of a constitutional provision for where these arrangements are to be made, it is left for the governments to design and participate in their own forum to manage their political relationships. Currently, this forum is COAG.

Both the Commonwealth and the states and territories have a strong incentive to attend COAG. The States and Territories, as a result of a drift of taxation power from the states to the Commonwealth since the 1940’s, are dependent on Commonwealth grants in order to fully fund their programs. The Commonwealth is also facing greater electorate expectations upon it than it has in the past and requires the states and territories to be in agreement with their programs in order for them to come to fruition. The result is a meeting where the leaders of the States and Territories and the Commonwealth come together, each with their own agendas, and negotiate to get the best deal for their jurisdictions. Sometimes, like setting up a national training system, interests align and an agreement is reached. Other times, such as the current education reform package, agreement is not forthcoming at the meeting. Sometimes, like with rules on royal succession, an agreement results after multiple meetings. The success or failure of these meetings hangs on the balance of political and parochial interests that each leader brings to the table and this situation is the primary basis for criticism of COAG. The solutions presented, however, are unsupportable.

Let’s examine what will happen if we abandon COAG completely. Because of the shared nature of political responsibility in the Australian federal system, without a forum like COAG meeting regularly each jurisdiction could legislate on almost any political issue without reference to other jurisdictions. This will inevitably result in overlapping regulation. As a result, the only way for jurisdictions to interact with one another in the policy formulation process would be through individual meetings between the Commonwealth and individual States and Territories or after the fact through a court challenge to an enacted law.  Neither of these options is practically feasible as bi-lateral meetings on every issue of cross-jurisdictional concern would be overly burdensome. Furthermore, challenging every law enacted with a cross-border concern in court would see the entire governance process grind to a halt while the cases were being considered. In addition, the extra cost and burden on the court system would have serious implications for the accessibility of the wider community to the justice system. As such, a meeting of government leaders is a practical necessity. As COAG is that meeting, abandonment of the process wholesale is impractical.

The second option is to slim down the COAG process, allowing the meeting more scope to deal with a smaller number of issues in greater detail. This seems reasonable in theory but in practice, as with abolition, it is not possible. As the independent financial capacity of the States and Territories continues to drop, and the electorate expectations on the Commonwealth continues to grow, more and more policy will need to be coordinated between the different levels of government. Put simply, the States and Territories need the Commonwealth’s money and the Commonwealth needs to draw on the legislative power of the states to implement policy. This means that the amount of policy which goes to COAG will inevitably increase. It will only be decrease if, somehow, the states and territories gain enough revenue to act more independently, or the electorate expectations on the Commonwealth decrease. Neither is likely.

This leads us to the final option of slimming down COAG and putting more issues to ministerial councils to resolve. This is not a solution as it only shifts the responsibility. Ministerial councils still exist and contribute to the policy discussion. Moving responsibility from COAG to ministerial council simply shifts issues to another forum. Furthermore, ministerial councils do not have the capacity for final government sign off, which requires the Prime Minister and Premiers.

Ultimately, the problems with COAG are a symptom of wider systemic issues with our federation. As long as responsibility is shared between jurisdictions rather than specifically distributed, negotiation and cooperation will be necessary and therefore, so will COAG. The only way to change this is to alter the constitutional distribution of powers or to create a body with greater capacity and without political division to conduct inter-jurisdictional negotiations. Even this may not fully solve the problem as interaction between jurisdictions is in the nature federal government. Either way until then constitutional reform is forthcoming; COAG, with all its flaws, is the best we have.

Mark Bruerton is a PhD Candidate at the Adelaide Law School, University of Adelaide.

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