Gerard Rennick (Queensland, Independent) Share this | Hansard source

I move:

That the following matter be referred to the Legal and Constitutional Affairs References Committee for inquiry and report by 10 December 2024:

The benefits of conducting a Federal Convention to examine the ambiguous roles between the state, territory and federal governments considering, but not limited to, the following issues:

(a) the need to streamline the duplication of bureaucracies to save billions of dollars in bureaucratic waste and reduce unnecessary regulations;

(b) the lack of accountability and transparency between the state, territory and federal governments;

(c) the need for state and territory governments to raise their own revenue to reduce their reliance on Federal Government funding;

(d) the need for Federal grants and goods and services tax allocations to state and territory governments to be much more transparent, efficient and effective;

(e) the need for the implementation of a co-ordinated infrastructure funding facility to provide capital for sovereign infrastructure;

(f) the need for the Corps of Royal Australian Engineers to take responsibility for building and maintaining all national land transport network roads; and

(g) any other related matters.

I'm pleased to move this motion today. As I said in my maiden speech, of all the issues faced by Australia, few are more damaging to our country than the fiscal imbalance and ambiguous responsibilities between state and federal governments. You've really got to ask why Australia, a country of 25 million, has nine growing health bureaucracies while maternity wards are being closed in my home state of Queensland. Our Constitution was designed for government to be held to account by the people, yet 120 years of compromise have rendered it ineffective. It's time for what was once COAG and is now National Cabinet to hold a federation convention to clearly define and separate these responsibilities, with proposed changes to be put to the people. The blame game needs to end, and Australians deserve much greater accountability.

I said this back in September 2019, when the bushfires were ripping through the east coast of Australia. I well remember that many people who came to my maiden speech had to take various diversions to avoid the bushfires. During the bushfires we saw the blame game at full throttle, with the federal government being blamed for not doing enough, despite the fact that state governments are responsible for dealing with fires and emergency management. We saw the COVID disaster, whereby there was constant bickering between the state and federal governments over who was responsible for what. Just a couple of weeks ago, up in Gladstone, we had another tragic accident up on the Bruce Highway, and of course the usual blame game is going on. I know my good friend the member for Wide Bay, Llew O'Brien, has had many fights and arguments with the Queensland transport minister, Mark Bailey, over getting funding to duplicate the highway north of Gympie. I know my good mate Llew is very passionate about improving road transport.

The point is that we can't deliver essential services in this country while there is continual bickering between state and federal governments. We can't generate productivity in this country when we have unnecessary rules, regulations and hoops that companies have to jump through to get something built. We saw that just recently with the dismissal of the proposed goldmine in Orange. Regis Resources have spent hundreds of millions of dollars getting regulation approvals from the New South Wales government, only to then come to the federal government and have the project kiboshed. The federal government isn't the government that's going to lose the royalties from that mine. It isn't the government that's going to lose the payroll tax from that mine. It's been very easy for the federal government to kibosh the mine over heritage concerns, but they're not the ones who lose the revenue.

I often talk about capitalism. A capitalist is someone who risks their own capital, not someone else's. We've got this agency theory going on in our federation whereby one level of government can stick the boot into another level of government and not reap the consequences, but this issue is much more systemic.

If we take health, for example—and I quoted this particular example in my maiden speech—we've had over 30 maternity wards close in my home state of Queensland in the last 30 years—not so many recently, but, between 1990 and 2005, a number of them shut down. That's despite the fact that we have these growing health bureaucracies, new departments, the new CDC and whatever, with lots of bureaucrats in the back end coming up with more rules and regulations. But we can't deliver essential services.

In health, the state government really only manages public hospitals. The federal government is responsible for funding private hospitals, it's responsible for Medicare, it's responsible for the PBS and it's responsible for approving drugs through the TGA, as well as other health issues. So wouldn't it make much more sense to move health to the federal government and then, in exchange, move education back to the state governments?

In education—and I often hear the other side of the chamber talk about this—we've got another situation whereby we have private schools funded by the federal government and we have public schools funded by the state government, and then we have this bickering over how much funding private schools get and how much funding public schools get. It's very hard to get a comparison between the schools to know what they get. And we have this bizarre situation where universities are owned by state governments but are funded by the federal government.

What I'm proposing here is a federation convention. I originally wanted a constitutional convention, but I think that was a mistake. I think it should be a federation convention because changes in these roles and responsibilities of the state and federal governments don't actually need a change to the Constitution. They can be a simple agreement through section 109, where they go, 'Okay, you take responsibility for this, and we'll take responsibility for that.' In doing so, you can eliminate bureaucracies and get them out of the road. You'll save money when you eliminate these bureaucracies, because what we've seen in the last 40 years is an increasing number of bureaucrats. If you look at the figures in the health sector, for example, the ratio of bureaucrats to frontline services staff is increasing.

The reason why I'd like education to go back to the states—one of the proposals that I've just suggested—is that I believe education is competitive and it would be good to have competition between the states. On the other hand, basic health, emergency services and things like that are very inelastic, and that matters. We often talk about competition in this chamber—at least on this side of the chamber—and there is this view that greater competition leads to greater outcomes. It doesn't always. Competition can be constructive and it can be destructive, and it's very important—and it's the role of government—to make sure that we have competition that is constructive.

To understand that, you need to also understand elasticity. When it comes to health, there is very little elasticity in basic health services. If I'm bitten by a big black snake out in a paddock somewhere, I'm not going to pick up the phone and ring around the country looking for the cheapest hospital to go to; I'm going to go to the nearest hospital. So we need to be able to deliver reliable health services across the country, regardless of where you live. That is very, very important, and that is the role of the government. It is the role of the government to provide a safety net. But we're not really providing a safety net for the people out there beyond the beltway—beyond the bubble here in Canberra. What we're really giving them is a set of rules and regulations. So that's one example that we need to look at.

Then we've got the whole energy debacle. Our energy sector is controlled by AEMO, and I stand to be corrected on the numbers here, but I think it's 40 per cent owned by the states and 30 per cent owned by the private sector, with another 30 per cent owned by the federal government. This is another classic example of where everyone is in charge and no-one is in charge. Our energy sector, of course, has become a complete mishmash, a Frankenstein's monster. We've got some public assets left in Queensland with our coal-fired power stations. We've privatised base-load assets in other states. We've then got the conga line of rent-seeking parasites in the renewables sector who are constantly milking the federal government for subsidies to keep their heads above water. State governments are throwing subsidies at both the renewables sector and the base-load sector now because they've run down the base-load sector so much that they have to go around propping that up, rather than having a simple model whereby one level of government is responsible for the provision of energy.

I would tend to go back to having the states run energy. It's not in section 51. There's no head of power, I'm led to believe, under section 51 that says energy should be the responsibility of the federal government. Having said that, I give credit to Ben Chifley for using 51(vi) of the Constitution to get the Snowy Hydro project built. He had to bring New South Wales and Victoria together, and at first, I'm led to believe, they complained, but when they realised the federal government was going to pay for it all they let it go through. That's another example showing where, if we let the energy sector run down, we may end up having to use 51(vi) if the energy grid collapses. Again, my experience in life has been that you've got to have clear lines of accountability. When you've got three players in this, a triangular system—state government, federal government and a private market—it ain't working.

On top of that, we've got the water sector. Nothing grinds my gears more than what happened as a result of the Tasmanian dams decision in 1983. Regardless of what your view on the environment is, the fact is that Bob Hawke used section 51(xxix), the foreign treaties powers, to override the powers of the state government. I'm pretty sure that when our founding fathers set up the Constitution and said that the federal government was responsible for foreign powers it wasn't so that they could then sign treaties whereby we've got UNESCO or whatever stopping the state government from building much-needed dams.

Might I add, a good way of providing renewable energy is hydropower, and we don't do enough of that in this country. It's no surprise that since that decision there have been very few dams built in Australia. I'll back dams over desalination plants any day, for two reasons: (a) you can get the sort of renewable power I do support, which is hydropower; and (b) you get irrigation. In this country, we need water security desperately because we do have a hot and dry climate and we can't sustain a rising population unless we learn to control our water. That was the whole basis for the civilisations founded in Middle East, the Indus Valley and those places. It's no coincidence that civilisation was built around the river systems of the Indus Valley; Mesopotamia, with the great Tigris and Euphrates rivers; the Nile River; and the Yellow River and the Yangtze River. These rivers were used for irrigation. The communities at the time were able to secure their food supply and, as a result of that, they went from hunting and gathering to farming. People could then go from farming into the cities, where they could specialise further into trades. If Australia wants to continue to grow and prosper, we desperately need irrigation in this country.

This brings me to one of the things I speak about in this motion, which is looking at a way in which we can fund infrastructure in this country. State governments don't have what is known as exorbitant privilege. They don't have their own currency; that is a domain of the federal government. But we should draw some inspiration from Lachlan Macquarie, who did understand the art of exorbitant privilege and the right of any country to control its own currency. One of the key responsibilities of any country is to control its currency. We need to look at having an infrastructure bank to help fund the state governments to build infrastructure. At the moment, if state governments want to build a dam for a billion dollars they generally have to borrow it offshore, and then the first billion dollars they make from that dam has to be repaid offshore. When they're borrowing money from offshore the biggest market in the world is the Eurobond market, which is all the US dollar bills that get traded around the world outside the US. That money just comes from the US printing press. It's ridiculous that we pay another country to use their printing press when we should be doing it ourselves in a constructive manner by issuing infrastructure bonds.

This is one of the biggest mistakes that people in the West make. We were taught through university that the art of exorbitant privilege is to be able to tap the nation's untapped wealth. In this country, we've got seven million square kilometres. We have this thing called untapped wealth. Every time it rains, that is free wealth falling out of the sky. Every time the sun shines on the soil and we have plants growing, that is free, recurring wealth every time. We need to secure that untapped wealth against the title that our forefathers fought for and built over the years, because that is the definition of a sovereign country; it is title over your untapped wealth. That is the true art of exorbitant privilege—to secure that untapped wealth for our children by issuing infrastructure bonds against the seven sovereign assets. Many of these are built by state governments. They need a funding facility so that they, not the foreign banks, can capture the wealth.

In summary, we need a Federation convention to look at reducing the bureaucracy, reducing cost to the taxpayer, streamlining regulations so that we can increase productivity and finding a way to help fund state governments and federal governments to build the infrastructure that delivers recurring revenue to pay for the recurring costs of our schools and hospitals in a sustainable manner so that our children and all Australians can have a better and more prosperous future.