IPA Briefing Document
The Galaxy poll conducted exclusively for the Institute of Public Affairs found that the majority of Australians do not believe that decision makers in Canberra are in touch with the needs of families and businesses living in Northern Australia.
Australia’s system of government is widely recognised as one of the most centralised in the world. Yet, as most federations move away from centralised governments, Australia is continuing to shift more powers and responsibilities towards the Commonwealth government.
Of the 1,063 Australians that were asked if they thought that decision makers from Canberra understood the needs of Northern Australians, 60% answered ‘No’. Only 16% said ‘Yes’ and the remaining 24% answered ‘Don’t know’. It is clear from these results that Australians do not feel that the current centralised system of government understands the needs of businesses or families in Northern Australia.
There has been great debate about the need for reform of the current federal system of government. Contrary to the trend being witnessed in other similar developed nations around the world, Australia continues to move towards a central style of government. In Federalism & Regionalism in Australia, Brown states that ‘Australian federalism is probably more centralised in its politics, finances and operations than many unitary, non-federal systems of government.’
A bigger government does not equal a better government. A major report produced for the Council for the Australian Federation, Australia’s Federalist Future, found that Australia faces significant problems as a result of its increasingly centralised federal structure. ‘Australia has the greatest amount of vertical fiscal imbalance and is the most centralised federation of the major comparable federal nations.’
A majority of Australians, no matter what age; income bracket; home state; schooling qualification; or socio-economic status feel that Canberra does not understand the needs of a significant part of the population. The Galaxy poll results indicate that Australians would favour reforming the current system of government. It is clear that they do not believe that a big, centralised government in Canberra is best placed to make decisions about regions that are geographically and socially distant.
This sentiment is also justified given the Commonwealth’s track record in making policy decisions for the rest of Australia. Australia’s Federalist Future contends that the ‘Commonwealth’s track record in providing services suggests that big is not always better and that a centralised system does not necessarily result in competency or efficiency.’
Northern and southern Australia are remarkably different regions. Canberra designs policies for the more populated southern areas, leaving Northern Australia to operate under a policy framework that does not cater for its specific needs.
A SPECIAL ECONOMIC ZONE FOR NORTHERN AUSTRALIA
Northern Australia is currently a key driver for Australia’s economy as was demonstrated in the latest federal budget. Yet government regulation and a lack of vision constrains the North from further economic growth.
The North is currently underpopulated and under-developed yet contains a wealth of natural resources. Australian policy makers should be taking advantage of this huge potential by implementing policies that encourage investment, increase infrastructure and create opportunities to deal with the skills shortage crisis.
Special Economic Zones (SEZs) have been used around the world to stimulate development and economic activity in underdeveloped areas. Recently, David Cameron announced plans to establish 21 new economic zones across the United Kingdom. Today there are around 3000 Special Economic Zones operating around the world.
SEZs are designated areas where tax and regulation are significantly relaxed or reduced. The focus of such a zone in Northern Australia would be to promote investment, create jobs, encourage skilled migration and transform depressed and under-developed regions into areas of considerable economic activity.
A zone that covers North Queensland, North Western Australia and the Northern Territory would invigorate these underpopulated, under-developed, but resource rich regions.
Since 1945 Australians living above the 26th parallel have received income tax breaks in recognition of their comparatively difficult living environment. Family living costs are high, local services are poor and community infrastructure is minimal. A Northern Special Economic Zone would be a logical extension of this policy assistance for Northern Australians.
The IPA’s North Australia Project aims to encourage economic development in Northern Australia. Public discussion surrounding the problems facing Northern Australia should focus on the implementation of a Northern Special Economic Zone. The IPA is currently undertaking seminars throughout Northern Australia to build the case for and gather input into the establishment of a Northern Special Economic Zone.
The government needs to reform the organisation of our federal system in order to address the concerns of the Australian people outlined in the Galaxy poll results. A Special Economic Zone would not only unleash the potential of the North, but would benefit all Australians.
The IPA is working with Australian’s for Northern Development and Economic Vision (ANDEV) to develop policies for a more competitive Northern Australia.
The Galaxy poll was conducted over the weekend of 13-15 May 2011. A media release is available from the IPA at www.ipa.org.au. More information is also available at www.andev-project.org.