Opinion article

Hold the Tim Tams and put better outcomes on the COAG menu

Ahead of the Council of Australian Governments' Meeting in Cairns, CEDA Chief Economist Jarrod Ball explains how COAG should refocus its priorities to effect meaningful change.  

When cancelling a COAG meeting last year, Prime Minister Scott Morrison famously quipped that the only consequence would be fewer Tim Tams consumed in Canberra that week.

The Prime Minister’s remarks, however lightly made, underline a truth worth remembering when COAG meets in Cairns this week: we cannot measure the success of Australia’s federation by the number of meetings and choreographed press conferences with leaders we hold or the number of communiques we exchange. 

Instead, the success of the federation should be assiduously judged by how it improves the lives of Australians. If Australia’s political leaders are truly invested in better outcomes, they would do well to peruse the latest COAG Performance Reporting Dashboard. 

The dashboard, developed by the Productivity Commission in partnership with CSIRO’s Data 61, assesses the progress of commitments under the various agreements between the Commonwealth and State and Territory Governments over the last decade. 

The 2019 update to the dashboard released in late June makes for a sobering read. Out of 44 target outcomes committed to in COAG agreements, just 15 are given the green light for having been met or likely to be met based on current progress. More concerning is that 13 outcomes have been given a red light, either because they have not been met or because Australia is going backwards. 

The ‘red light’ commitments occur right across the spectrum and include reducing rental stress, improving employment outcomes for vocational education graduates, reducing emergency waiting times and halving the gap for Indigenous numeracy and reading.

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The community has grown increasingly sceptical of bodies like COAG and the functionality of the federation itself, despite having a big stake in its success. CEDA’s Community Pulse research found that the community cares most about government policies that depend on effective cooperation across the federation like healthcare and housing.

Given this backdrop, what should COAG do at its August meeting to turn around recent trends? The meeting will inevitably focus on issues of the day, such as how the rollout of infrastructure projects can provide ballast to a weakening economy. Yet if COAG is to make a difference in people's lives and avoid a rolling agenda of short-term crises and issues management, it needs a longer-term focus.  

Dealing with long-term issues will be easier if current governance and machinery is consolidated. For example, earlier this year CEDA’s Sustainable Budgets report identified 76 National Partnerships, projects and other agreements that inject Commonwealth funding and oversight into areas of state and local government responsibility.

COAG should re-commit to the ambitions and objectives of the 2008 Intergovernmental Agreement on Federal Financial Relations and consolidate current funding agreements. Such a move could reduce Commonwealth prescriptions on service delivery by the states and rationalise the number of tied grants to the states. It might also generate goodwill and grease the wheels of reform so that COAG can seriously tackle the outcomes where our federation is falling short in innovative new ways.

One of those areas is healthcare. In recent years, the prevalence and cost of chronic health conditions has grown unabated, along with public waiting lists. Indications are that the Commonwealth and states are getting closer to finalising a new National Healthcare Reform Agreement. While greater predictability of funding is important, real success should be judged by the extent to which reform meaningfully reduces waste and delivers better care. This requires accelerated efforts on patient-centred care, performance measurement and transparency, low-value health interventions and providing integrated care across a highly fragmented system. 

On skills, there is growing agreement that the current vocational education and training system is not effectively serving the needs of industry or workers, a sentiment supported by the performance dashboard. Some have criticised the quantum and flow of funds from the National Partnership on the Skilling Australians Fund, and the Queensland and Victorian Governments are yet to sign up to it. The government’s ambition to upgrade the VET sector and lift employment outcomes for VET graduates can no longer be pursued without the full force of the federation.

Finally, one of the crowning achievements of federal-state relations has been previous competition reforms to open up the Australian economy, improving choice and prices for consumers. Today, the latest intergovernmental agreement on Competition and Productivity-Enhancing Reforms signed almost three years ago lies dormant, with no published milestones, projects or achievements. At a time of lagging productivity, wages, and business investment, this agreement should be dusted off and leveraged to unlock the gains for consumers from new forms of competition and technology.   

Over recent decades, COAG has earned a bad rap in the community for being bureaucratic, ineffectual and disconnected from people’s lives. But if COAG hones its focus, it could make a very real difference to the things the community cares about most.

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.