The centralising trend in Australian federalism, while sensible in some arenas, means that a whole new approach is needed towards rebuilding a sensible system of government, including reviving the advantages of federalism. This could be by refashioning traditional ideas of states’ rights, by substituting a viable new national framework of regional devolution, using central power to more effectively decentralise. Given the recognised limitations of state and local government in the existing system, it is not simply a matter of trying to wind back the clock, or redistribute resources among existing institutions.

Instead, what is needed is a coherent national approach, the heart of which must be a viable, effective framework of regional governance. If we are serious about federalism, this should include ‘general-purpose’ regional government which is large enough to be viable and adaptive in fulfilling a wider range of policy needs than current local government, but operating at a scale more aligned with the real communities of interest of constituents, than can ever be the case with most present state or territory governments. To truly rebuild an effective federal system, of course, the fact that Australians live, work and govern themselves using these regions should also be recognised and legally protected in the Constitution. Whether or how the other existing levels of government would need to be reformed, to work in with an effective regional governance system, are secondary issues to consider once the primary need for a new framework is accepted.

The design of any new regional governance framework would have three fundamental components: (1) the functions or tasks which such regions would perform; (2) the determination of the boundaries of those regions; and (3) measures to ensure that the regions are sustainable.

Approaching the first issue of tasks, it is instructive to turn to previous endeavours which have been made in Australia to unscramble the omelette of federalism and identify the functions which are appropriate for each level of government. The most comprehensive attempt was by the Australian Advisory Council on Intergovernmental Relations (ACIR 1981) which scoured the economic and political/administrative literature, and global experience, to identify criteria which would help in the assignment of functions to levels of government. The research was aided by similar efforts which had been made in Canada (the Rowell Sirois Commission 1940), and the USA (the Kestnbaum Commission 1955) as well as two seminal Australian reviews – the 1927-29 Royal Commission on the Constitution, and a 1958 Parliamentary Committee Review of the Australian Constitution (Australia 1929, 1958).

The key lesson from this exercise was that it was no longer appropriate to try to assign whole functions to particular levels of government. Rather it has to be accepted that most of the functions would continue to be shared and the appropriate task was to identify the roles which each level of government would play in those shared functions. Nearly a decade later the movement known as Prime Minister Hawke’s New Federalism adopted this approach as part of its sweeping reform of intergovernmental relations, especially as a result of three Special Premiers Conferences which were the forerunner of COAG (EPAC 1990; Wiltshire 1992). The research identified criteria which would point to the role of each level, as shown in Table 12.1.

Source: Wiltshire 1977, ACIR 1981

The second element of the regionalism imperative is to define the regions and their boundaries. Once again there have been some well established criteria employed in the past. The best known is the concept of community of interest, which is the paramount criterion. A region which does not share a community of interest is not worth a ‘brass razoo’. Another well-known phrase, often used in relation to local government boundaries, is that a region should be large enough to achieve economies of scale, but small enough to be responsive and encourage civic participation. A third important aspect which often appears is identity. People living in a region must feel that they share a common identity.

These may sound like theoretical concepts, but they are given reality every day in our current system of governance. Bodies such as the Electoral Commissions, Telstra, Australia Post, the Australian Bureau of Statistics, and most government agencies, employ these concepts to define their boundaries for service delivery, civic participation or community engagement. The measures which these bodies all use to delineate their regions, based on these concepts, include:

Given the strong current recognition of the importance of environmental sustainability, the ‘eco’-criteria will most likely dominate this list in the foreseeable future.

Once the roles of the regions and their boundaries are determined, the third fundamental stage is to consider what policy measures need to be taken to ensure their continuing viability, in order to carry out these roles. This is where genuine devolution occurs as a solution to the major problems of the existing system. With many local governments currently financially unviable, properly-resourced regions can ensure that local and regional services do not simply disappear. With state government often too remote and pre-occupied to effectively coordinate and push through new policy solutions, such properly-resourced regions can do this. However we know from the existing experience of state and local governments that some or all of the following will be required: