Opinion article

Why you shouldn’t write off national cabinet

CEDA Chief Economist Jarrod Ball says that despite negative appraisals, National Cabinet has resolved a number of critical issues during the pandemic and that it has the potential driving positive outcomes. 

This article was originally published in the Australian Financial Review on August 19

The COVID-19 delta variant has destroyed solidarity in Australia’s federation like no other moment of this crisis.

As the community desperately seeks a path out of the pandemic, we have instead endured squabbling, finger pointing and point scoring, be it about vaccines, border closures, lockdowns or fiscal rescue packages.

As the recent Administrative Appeals Tribunal decision confirms, the source of authority and solidarity for a cabinet of federal leaders all accountable to different parliaments is just as murky in theory as it is in practice. It’s no wonder current and former political leaders of all stripes have been lining up to ring the death knell on national cabinet.

For the most pessimistic, no such body can run the federation. Even the most optimistic argue it is fine for the pandemic, but has no place longer term.

Despite the unseemly political theatre, national cabinet has successfully resolved several critical issues when lives and livelihoods were on the line. The COVID-19 disaster payments deployed in the most recent lockdowns are just one example. The payments to individuals combined with state government payroll assistance have resulted in a scheme that is effectively JobKeeper under another name.

National cabinet has been at its best when it agrees on a broad framework, then leaves the states and territories to implement the solutions, relying on the best local advice.

This was evident in the easing of restrictions in 2020 as states and territories progressively emerged from lockdown. There are promising signs that current in-principle agreements on vaccine targets to ease restrictions may go the same way. There has even been belated recognition that short, sharp lockdowns inflict less damage than greater tolerance to growing case numbers – one of the benefits of experimental federalism.

None of this is to deny the many messy and confusing moments the public has had to bear through gritted teeth, or that our politicians never managed to fully quash the virus despite our early successes setting us on that path. This could have been possible with better quarantine and a faster vaccine rollout. But Australia has often been far more unified in its approach than the states of the US and the provinces of Canada.

In the early stages of the pandemic, Canadian provinces were reported to be “looking over their shoulder”, seeking to anticipate neighbouring provinces’ COVID-19 restrictions, rather than meeting to discuss and coordinate their approaches. Their slow response gave the virus a head start, and at last count they had 19 times more deaths per capita than Australia.

We also should not underestimate the potential of other new federal bodies to help the economy accelerate over the longer term. Through the Council on Federal Financial Relations, state and federal treasurers have reached a deal on the automatic mutual recognition of occupational registrations. This will finally allow tradespeople to move and work across borders unimpeded by red tape, overcoming decades of intransigence on a clear no-brainer for our economy.

Whatever the future for national cabinet, we cannot afford to return to anything even vaguely resembling COAG. Long known as the place “where good ideas went to die”, COAG met just twice a year before the pandemic, yet still produced an alphabet soup of councils, committees and tied-funding agreements.

So how do we make national cabinet – or its successor – work more effectively?

Leaders must first rediscover their goodwill and re-commit to the national interest. This doesn’t mean following a doctrine of uniformity set by the Commonwealth – this is rarely achievable, nor is it desirable. But it does mean lending a hand across state borders when needed, without sniping about who is doing a better job. COVID-19 has proven it can break a leader as quickly as it can make one.

And regardless of whether the “cabinet” tag and its associated legal status stays or goes following the AAT decision and any subsequent appeals, a dose of sunshine on its deliberations would go a long way. We don’t need a turgid communiqué after every meeting, but greater disclosure of deliberations, agreed outcomes and commitments from each meeting would help to hold leaders accountable.

In the longer term, we must invest in our federation in a way we have not contemplated since the Federation White Paper process was abandoned in 2016. We need a serious body in Canberra dedicated to better federal governance and reform. It should have proper state and territory buy-in, include staff with broad experience, and borrow personnel from state governments. A bonus for the Commonwealth from this would be the opportunity to learn from the states a thing or two about delivering services on the ground, a federal shortcoming laid bare in this pandemic.

We also should make treasurers the engine for reform through the Council on Federal Financial Relations.

Finally, we need a federal-state intergenerational report to show just how intertwined the long-term fates of governments across Australia are. We should not forget that every Commonwealth turn of the fiscal needle has a significant effect on states’ ability to deliver the services the community expects.

The value of national cabinet is not dead. But to give it the best chance of survival we must rediscover the solidarity that drove its creation and harness it to drive better outcomes for all Australians.

About the authors

Jarrod Ball

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Jarrod Ball joined CEDA as Chief Economist in 2017 with over 15 years of experience as an economist across the public and private sectors. He has held senior roles at the Business Council of Australia, in EY’s advisory services practice and more recently at BHP. Jarrod also worked in the Federal Government and was a lead adviser on microeconomic reform for the Victorian Departments of Premier and Cabinet and Treasury and Finance. He is a member of CEDA’s Council on Economic Policy and the Melbourne Economic Forum. Jarrod holds a Masters degree in Economics from Monash University and undergraduate degrees in Business (Economics) and Arts from the University of Southern Queensland.

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