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Federation white paper will look at a slimmer role for Canberra

Prime Minister Tony Abbott today releases the terms of reference for his government’s federalism white paper. AAP/David Crosling

The Abbott government’s strong preference for limiting the role of Canberra and boosting that of the states is a central thrust in the terms of reference for the white paper on reforming the federation, released today.

Issues to be considered include “the practicalities of limiting Commonwealth policies and funding to core national interest matters”. The paper will also look at reducing or, if appropriate, eliminating overlap between local, state and Commonwealth involvement in delivering and funding programs.

Among the issues considered will be achieving agreement between state and federal governments about their “distinct and mutually exclusive responsibilities” and funding sources.

Preparation of the paper will be overseen by senior officers in the prime minister’s department and state and territory first ministers’ departments as well as the Australian Local Government Association.

A green paper will be released in the first half of next year and a white paper by the end of the year.

The objectives of the white paper are to reduce and as far as possible end “the waste, duplication and second guessing between different levels of government”, achieving more effective federation and improving national productivity.

The federal system should be better understood and valued by Australians, have a clearer allocation of roles, enhance governments’ autonomy, flexibility and accountability and support Australia’s growth and competitiveness.

The Abbott Government wants less Commonwealth intervention in the areas where the states have primary responsibility.

The paper will look in practical terms at the allocation of roles and responsibility in the areas of health, education, housing and homelessness (with issues papers produced), as well as other areas including transport infrastructure, indigenous affairs, justice and disability.

The terms of reference include looking at the most appropriate approach for ensuring that horizontal fiscal equalisation does not result in individual jurisdictions being disadvantaged in the services they can deliver to their citizens.

There are perennial arguments between the states about the distribution of the income they get from the GST, with Western Australia in particular complaining loudly about the disparity between what its citizens contribute and what the states get back.

The white paper will also look at what improvements should be made to the operation of the Council of Australian Governments (COAG) “so it is a strategic, consultative and co-operative decision making forum”. The Prime Minister has been critical of the COAG agenda being too overloaded under Labor and believes it should be operating at more of a helicopter level.

The federation white paper will be closely aligned with the white paper on the reform of the taxation system.

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