From COAG to National Cabinet- the Council on Federal Financial Relations

The Council on Federal Financial Relations (CFFR) has a lot of heavy lifting to do under the new National Federation reform structure.

Not only does it have to revise and rationalise National Partnership Agreements, it is at the front and centre of taxation and regulatory reform.

In relation to deregulation, as it happens there is already in place an Intergovernmental Agreement on Competition and Productivity-Enhancing Reforms, already signed by most (if not all) jurisdictions which identifies subject areas where reforms are ripe for the making.

Interestingly, that IGA has a clause reading:

The Commonwealth will provide payments to the States for the delivery of reforms that drive Australia’s economic performance and living standards. The Commonwealth and the States will work collaboratively to develop funding agreements in the priority areas at Part 4, in accordance with this Agreement and the Intergovernmental Agreement on Federal Financial Relations.

Payments similar to the competition payments made under National Competition Policy has been something pushed by Victorian Treasurer Tim Pallas. It will be interesting to see if reform is ultimately delivered through a renewed NCP regime with suitable jurisdictional ‘incentives’.

More generally, regulatory reform and National Partnership Agreement rationalisation is a complicated task which will take up a lot of time of State and Federal treasuries.

It is therefore important to understand how the CFFR system will gain advice from external stakeholders such as industry associations and other expert bodies as to whether the ideas and policies that will ultimately be implemented in proposed reforms will actually work in practice.

This is because treasuries may not have a full understanding of how particular industry sectors work at the granular level necessary to achieve successful reform.

In that context it is interesting to remember that an attempt to bring about a national scheme of regulation for specified occupations (which were pretty similar to the occupations listed in the Treasurers latest press release) fell over in 2013, in no small part because the principal body of officers ultimately charged to recommend a licensing model to governments were officers from treasuries with no experience in the development or administration of consumer protection laws and who ultimately proposed removal from licensing laws of various provisions designed to protect the public, something which had little support from either industry or government.

Something to watch over the intermediate term is whether there will be another effort for national occupational licensing regulation, and if so which bit of the national federation reform process will have carriage – a national cabinet reform committee, a ‘consolidated and reset’ ministerial committee or the CFFR or alternatively whether working relationships will still need to be maintained at the jurisdictional level.

Finally, with respect to taxation reform, as discussed in a previous post taxation reform could be a slowly moving beast.

Between the contents of the Henry Report and the Re:Think tax discussion paper most of the available options for tax reform have been well and truly canvassed. The question now is whether there is the volition for reform. It will be interesting to see how what is in effect the same policy silo discussing the same subject matter will actually propose reform.


The jury is out as to whether reform will be achieved as the horrors of bushfires and COVID slowly but surely move into the rear vision mirror.

The Abbott Government’s Reform of the Federation initiative fizzled after the publication of one green paper.

Only time will tell as to whether there is the genuine will to restructure the administrative structure of the Australian federation in a manner that will improve the productivity of the economy.

By | 2020-08-31T14:54:35+10:00 August 31st, 2020|Uncategorized|0 Comments