Kevin Rudd's challenges: federal/state relations

The most prominent challenge that Kevin Rudd faces is the long overdue task of making sense of the relations between the state and federal spheres.

Both sets of government have important tasks and need to be given clear responsibility and accountability. We have a real chance to do this, not only because there are six state Labor governments but because at least three of them (Queensland, Victoria and South Australia) have top people in charge.

Once again Rudd needs to work quickly because many Canberra public servants have little time for states and are constantly looking for mischief .

One of the dangers is that Rudd has not really thought out some of the policies that got him to power. For example, the idea of putting a computer in every child's hand gained lots of votes and differentiated Rudd from Howard but the detail had not been thought out. Who will own the computers, the children or the schools? If they belong to the children, a lot of the computers will go missing because children use computers as adults treat newspapers. If the schools are to own and operate them then they will need to train staff and have much larger infrastructures, which is costly. To Julia Gillard's great credit she is looking to take a gradual approach but in the process momentum may be lost

The most obvious solution is to end the division between state and Commonwealth and, say, hand all of health to the states and perhaps all of education to the Commonwealth. But a better model might be Malcolm Turnbull's agreement with Victoria on water, which was eventually spiked by John Howard. In this agreement, the Commonwealth set the rules and monitors performance but the state carries out the task.

A major problem in sorting out state relations is that our largest state, New South Wales, is in a self inflicted mess. In Sydney, houses are unaffordable because of high state and local taxes plus incredibly stupid regulations. Rudd may need to become a lot tougher in this area because Australia can't prosper when the biggest state is not performing up to the level of the others.

To read the first four parts of Robert Gottliebsen's seven-part series on Kevin Rudd's challenges, see:

Kevin Rudd's challenges - IR

Kevin Rudd's challenges - broadband

Kevin Rudd's challenges - carbon emissions

Kevin Rudd's challenges - regulation and tax