Enfeebled by ideology, the federal government has shifted power to the states

One of the long-running subtexts of neoliberal policymaking in Australia since the 1980s has been that Australia’s internal borders are a relic of colonialism that frustrate economic efficiency.

If we can’t abolish the states then we can make sure that regulatory differences between them are harmonised; that national — or at least east coast — markets in essential services like electricity and water operate effectively; that competition-policy prevents state governments that cling to government-owned bodies from unfairly competing with the private sector.

High Court decisions in the cases of Hammond v New South Wales and Ha v New South Wales on state taxes, and the Howard’s government GST, further subordinated the states to the Commonwealth in taxation matters.

In 12 months, however, the long transfer of power from states to Canberra has been dramatically reversed.

It is the states that have driven Australia’s successful handling of the pandemic, through the twin tools of lockdowns and border closures. State and territory borders, for so long mere lines on a map, have taken on very real force as roadblocks have been set up and police have imposed checkpoints.

Western Australia went further and essentially isolated itself from the rest of the country.

Business has been apoplectic about this reassertion of states’ rights, but to no avail. Voters have loved it; the harder the border, the more popular the government. In March, Western Australia’s Mark McGowan obliterated his political opponents in one of the biggest electoral wins in Australian political history.

The federal government has been reduced to a bystander on the issue, capable only of railing futilely at border closures. Christian Porter’s support of Clive Palmer’s failed attempt at defeating the WA closure only inflicted political pain on the government.

Now the process is being repeated on the vaccination rollout. The states have responsibility for hubs handling the vaccinations of frontline health care workers and have delivered nearly 680,000 doses. The Commonwealth has responsibility for primary care and aged and residential disability care, and has only delivered just over a million doses. Its rate of delivery of doses has barely shifted in the last week. It has only once exceeded 50,000 in a day. Virtually no one in the residential disability sector has been fully vaccinated.

National cabinet — the rebadged COAG — is now meeting twice-weekly at the request of the Morrison government, so that the states and territories can be given a greater role in the rollout — particularly by establishing more of the vaccine hubs that have allowed the states and territories to rapidly vaccinate their frontline health-workers.

But all that depends on access to vaccines, which is entirely within the control of the Commonwealth and which has been badly botched.

There’s no coincidence here: as Crikey explained last week, the Commonwealth has enfeebled itself when it comes to using its powers to deliver quality outcomes, services and regulations, while states and territories, which remain primarily service delivery bodies, have retained institutional capacity to run large-scale programs, especially in the health sector.

That means a significant transfer of power from the Commonwealth to the states, and one that isn’t likely to be reversed any time soon.

The nature of the pandemic and the likely need for ongoing pandemic controls at least into next year means states and territories will continue to exercise strong powers over borders and movement.

A greater role for them in the vaccine rollout will transfer the political credit the government was hoping to obtain from a successful rollout to state capitals. Any return to “normality” — in which the Commonwealth is strong and the states supplicants — is a long way off.

And there’s the psychological effect of the Wizard of Oz moment at the heart of the vaccine debacle: the Commonwealth has revealed itself as hopelessly inept and needing the help of other governments to perform even the basics of a long-planned but entirely bungled major program.

State and territory leaders, like the good politicians they are, can smell blood and fear a mile off.