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COAG: How to turn a ‘parking lot for tough decisions’ into something really useful

Many of the nation’s most pressing problems cannot be met by any one government acting alone. Reforms to health, the environment, education, Indigenous disadvantage, taxation, business regulation and water policy all require joint action across governments. This explains why the Council of Australian Governments has become a key driver of our future prosperity and quality of life. Unfortunately, COAG itself does not reflect this. It needs to be better equipped for the challenges that lie ahead.

Australia has a federal system in which it is no longer clear who is responsible for what. It has become a herculean task to separate out the roles of the Commonwealth and the states even in vital areas like health and education. As a result, major problems can cut across government programs at all levels.

This is where COAG comes in. As the peak inter-governmental forum in Australia, it comprises the Prime Minister, State Premiers, Territory Chief Ministers and the President of the Australian Local Government Association. The body was first convened by Prime Minister Paul Keating in 1992, with each Prime Minister since assuming the role of chair and control of its agenda. A new federal bureaucracy has also grown up around COAG, including a Reform Council to help achieve its program.

But while COAG is more important than ever before, its effectiveness is increasingly being called into question. NSW Opposition Leader Barry O’Farrell has called it a ‘parking lot for tough decisions’, and others have expressed concern that its ambitious reform agenda has stalled. While COAG has achieved some significant reforms, the momentum of the early days of the Rudd government seems to have faded.

Most commentators put this down to the new balance of power around the COAG table. When it next meets, COAG is expected to have three Liberal leaders for the first time since 1999, including those of the two largest States in New South Wales and Victoria. The days of a Labor Prime Minister meeting with eight Labor leaders are over, and some have predicted the end of the era of federal cooperation and the beginning of a new period of disunity and division.

But COAG’s new balance of power could also be productive. A well-functioning federal system strikes a balance between cooperation and competition. Cooperation is crucial for addressing the nation’s most difficult policy problems, but competition helps to bring energy and new ideas to the process. Provided that the focus stays on serving the national interest, COAG’s new membership could ensure a better balance between these two forces and be to its advantage.

The greatest threats to COAG’s effectiveness lie elsewhere: first, in a lukewarm political commitment to its reform agenda; and second, in its outdated governance structures.

Currently, COAG waxes and wanes in line with the political commitment of the federal government. The Prime Minister alone decides when a meeting will be called. Under Keating and John Howard, COAG usually met once a year, sometimes only for a few hours. Under Kevin Rudd, COAG met more often, including four times in 2009 alone.

Julia Gillard, on the other hand, did not convene COAG until April’s meeting on health. This led Paul McClintock, chair of the COAG Reform Council, to lament that, ‘with the recent political changes and the 10-month hiatus in COAG meetings, some players are now unsure whether there is a strong political commitment to doing business’. His concerns were reinforced by the Council’s finding that 10 reforms vital to productivity growth, including in the areas of occupational health and safety and directors’ liability, are at risk of failure.

It remains unclear whether COAG is a big part of Gillard’s plans for national reform. The risk is that, with a hung Federal Parliament, the Commonwealth will focus inward on managing more limited change across its own fraught political terrain. This would come at the expense of reaching out through COAG to solve a wider range of national challenges in combination with other governments.

This exposes a central problem with COAG. Its effectiveness remains vulnerable to the level of interest and shifting circumstances of our federal leader. This would not be a major concern if COAG were nothing more than a meeting of leaders. It is now unacceptable because COAG has evolved into the main engine room for national cooperative reform.

This leads on to the second threat to COAG’s effectiveness: its governance structures were designed for an occasional meeting, not a central institution of executive government. This made sense two decades ago, but is now desperately out of date.

For this reason, COAG must not only drive change, it must itself be reformed. It needs to be put on a sound footing as a permanent fixture of Australia’s political landscape. Barry O’Farrell addressed this issue in a recent speech to the National Press Club. He called for a number of sensible reforms, some of which have also been supported over several years by the Business Council of Australia.

Most of the changes require attention to the basics. COAG should jettison its ad hoc, unpredictable schedule in favour of meeting twice each year, with others convened as required. A prearranged, regular meeting schedule is required to enable better planning and more public debate about the next reform opportunities.

COAG also needs to be released from the tight control of the Commonwealth. It should be funded by all participants and have its own independent secretariat. Prime Ministers need to loosen their grip on the meeting agenda to allow the States, Territories and local government to raise issues for discussion and debate.

The truth of course is that the Commonwealth will always dominate COAG. It controls the purse strings, has the greatest capacity to impose its will and no deal can be reached without it. Given this, it does not need to manage COAG in a way that can deny other governments the scope to propose new areas of reform and cooperation.

Finally, COAG must become more transparent and accountable. Its discussions take place behind closed doors, and its decisions are announced in a press release or communiqué with few details. The public needs to know more about COAG and how it operates.

To help improve accountability, parliaments need to be given a greater scrutiny role over COAG decisions. There is no requirement that COAG agreements be brought before parliaments and, when they are, they are presented as a fait accompli. This runs against our tradition or responsible government. When federal, State and Territory leaders commit themselves to joint action, these agreements should be tabled in parliament, and the most important should be referred to standing parliamentary committees in each jurisdiction.

Left in its current form, COAG will continue to function in an ad hoc, unaccountable and ultimately ineffective manner. For the benefit of the federation, it must itself be reformed, and allowed to operate in a way that reflects its role as a powerful and important part of our democracy.

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