Focus on: National Federation Reform

Last month PM Scott Morrison secured the support of state and territory leaders to overhaul intergovernmental relations with the formation of the new National Federation Reform Council (NFRC), replacing the nearly 30-year-old Council of Australian Governments (COAG) model.

The restructure seeks to use the national cabinet model – formed in response to the coronavirus pandemic – as the ongoing mechanism to drive inter-governmental reform, productivity and national problem-solving.

The Council on Federal Financial Relations (CFFR), comprised of all federal and state Treasurers, will continue to be a key element of the new model. Once a year, the National Cabinet, CFFR and the Australian Local Government Association will meet in person as the NFRC with a focus on priority national federation issues

The PM didn’t pull any punches when announcing the change, describing COAG as a place “where good ideas went to die”. In contrast to the COAG process, which has long been criticised as cumbersome and bureaucratic, the National Cabinet’s handling of the pandemic has redefined what effective inter-jurisdictional governance can look like.

To foster ongoing unity and purpose, the PM said the National Cabinet will initially be driven by a singular agenda – to create jobs. He also highlighted the importance of Ministers at state and federal levels talking to each other and streamlining that process.

Under the new structure, National Cabinet will oversee seven ministerial reform sub-committees in select areas that will consolidate the work of 19 ministerial forums and nine regulatory councils. They include:

  • Rural and Regional
  • Skills
  • Energy
  • Housing
  • Transport and Infrastructure
  • Population and Migration
  • Health

These committees will work as cabinet-like groups, rather than reverting to their old COAG models. Introducing ‘cabinet-in-confidence’ provisions will also add a new dynamic, by seeking to restrict public commentary and publication of their deliberations.

The National Cabinet will continue to meet fortnightly during the pandemic before moving to a monthly schedule in the post-pandemic period. The PM said the ability to meet virtually and more frequently is expected to enable greater flexibility and reduce formalities. It has been noted that leaders have already held the equivalent of a decade’s worth of COAG meetings during the coronavirus pandemic.

Once the public health crisis has passed, the key question remains whether effective cooperation in the National Cabinet can be harnessed to address the long-term challenges in state and federal relations.

While there is cause for optimism, highlighted by the substantial goodwill demonstrated by leaders, there is a risk that cooperation will dissipate when political tension and competition between governments naturally re-emerges, potentially constraining national reform outcomes. There have already been disagreements over reopening borders and schools, with some states choosing to go their own way.

Only time will tell whether the new National Federation Reform Council will be the “congestion-busting” process that the PM hopes for.

Kirk Stubbs is a Senior Consultant for GRACosway in Brisbane. Kirk provides comprehensive corporate affairs, policy and government relations advice to clients across a range of sectors. Earlier in his career, Kirk was an adviser to a Queensland Treasurer and worked for state and federal MPs. You can contact us here.


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