The benefits of federalism to business outweigh the disadvantages in Australia

Federal political system has been in place in Australia for over 15 years. During this last 15 years, this system has redefined how major government and non government operations and policies are to be executed. The main purpose for the constitutional move towards the federalism was to have even distribution of resource, improve on best practices and achieve efficiency where one federal region can learn from the others diverse achievements. (Brown 2007).

However the federal system in Australia has received varied satisfaction and dissatisfaction from the business goals achievement area.

This diverse view has often sparked a lot of debates in the legislative assemblies and at public forum. What is evident is that where there is cooperation rather than coercion, the business sector have registered significant prosperity. This is true because many business input resources may be scarce of localised in some federal regions with need to the other regions. This is where the top government is required with policy.

(Brown 2007). This paper adopts the position that the benefits of federalism to business in Australia far more outweigh it disadvantages, especially when there is good federal policy framework and harmony between the federal regions.

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Thesis statement: The benefits of federalism to business outweigh the disadvantages in Australia. Benefits of Federalism on business in Australia First, the federal system allows ease of migration by business entities from one region to the next, where they feel their full potential can be achieved. (Walker 2001, p. 35).

An example of this kind of free movement is in the Queensland area.

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Earlier on this area was believed to be a state business area and a lot of bureaucracy surrounded business ventures then. (Parliament of Victoria 1998, p. 9-12). Second the federal system allow Australian business sector to try out strategies and options before making them official policy. (Walker 2001, p. 35). Earlier on most business policies were simply passed from the centralise government and the affected sectors were required to comply without pre-testing the consequences.

Therefore when central driven policies failed many businesses would be counting a lot of losses. The results of such failed central driven policies have been expressed in the various activists’ demonstrations throughout Australia. (Walker 2001, p. 36) Third, Australia is a very diverse country from business culture to economic views. Therefore the federal system has been able to exploit these diversities to the business sectors competitive advantages. This is because the federal system is only geographically constituted but does not delineate the social and economic investments to those limits.

(Walker 2001, p. 36)As compared to the centralised system, there is more diversity sharing in the federal system. Most business sector prefer this to the democratically drive model of majority grabbing recourses from the minority. (Calabresi 1995, p. 775). Fourth, federal system is considered more democratic that the preceding system because the various levels and regions provide a platform for wider consultation before a business policy is passed. In the previous central business policy driven era, there was over reliance on few head that were considered elites.

This muzzles the wider business community opinions. (Wheeldon 1997, p. 78) Fifth, the federal system protects the business prospect liberties from any higher forces and interference; hence there chances of dictatorship and oppression are curtailed. Therefore, whenever there are businesses or commercial judiciary proceedings, there is less chance of interference from other higher powers. (Walker 1990, p. 191). Sixth, the federal system can allow the business fraternity to supervise the operations of the top government more efficiently because of the devolved costs of supervision.

This is a good way of ensuring the top government does not abuse powers when deliberation on business issues like taxes imposition or exemptions, business levies and tarrifs. (Walker 2001, p. 38). Seventh, the federal system allows business entities to carry on with their sector innovations and ideas with maximum stability accorded from the region. When businesses are aware of the burden of losses to be incurred when there is instability across all sectors, they will take a leading role in the stability and innovations campaigns. (Walker 2001, p.

38). Eighth, the federal system is a good way for the business sector to spread risks. This design is devoid of past central business policy that precipitated grand failures. Therefore, the federal system will allow one region to learn from the other success and failure when formulating their next business steps. In fact federalism has been very instrumental in demolishing some business policies that favoured corporate capital centralisation around Victoria, West and South Australia which fuel inflation all over the nation. (McGuinness 1990)

Ninth, federal system enable the business sectors in Australia to compete fairly while impressing on the government to provide efficient infrastructure networks so that they business can lower their operation costs. One such avenue that the federal business sectors have been successful is in challenging the government to reduce taxes that reflect the business reality on the federal region. Thus the federal system puts checks and balance on the government monopoly which would prevent them from competing with their business industry peers in other regions. (Grossman 1989, p. 31).

Finally, federal system in Australia enables the business sector to provide a competitive guide that can be emulated by other nations in the world who have similar ideology and system of government. Indeed, since Australia started the system, they have realised growth in GDP and even surpassed their neighbour like New Zealand who were earlier ahead of them. (OECD Economic Outlook 66 1999, p. 220). Federalism has enabled business to compete so effectively that they have uplifted the living standards of many Australians. (Coghill 1993, p. 10). Arguments against Federalism on business in Australia

Despite the many advantages of federalism on business in Australia as highlighted in the preceding section of this paper, there are some few disadvantages worth noting. First, the federal system was not unanimously accepted in Australia at the beginning. It was impressed upon them because of their economic history. The Australians were generally not as competitive as their neighbouring nations or leading states in the world today. Thus the some business cooperation is still lacking and this weighs down on the economic growth. (Twomey & Withers 2007, p. 18).

The second argument against federalism in business is based on the feeling that it belongs to two centuries ago and does not gel with trends such as globalisation. Similarly federalism leads to lack of international business cooperation because many people interpret it to mean that the benefits of the resources should remain within their region exclusively. (Twomey & Withers 2007, p. 18) The third argument against federalism is the burden, which is evident in the processes that people have to go through to reach the central or top government machinery for major policy deliberations.

The administrative costs are passed back to the business fraternity in form of taxes. (Twomey & Withers 2007, p. 18) Fourth opponents of federalism argue that the system leads to duplication of business systems which escalates cost in the long run. There are certain business registration and certification procedures that can be done from one centralised location, but the hierarchical process lead to extra manpower time seeking approvals, various fee payments and even taxes. (Twomey & Withers 2007, p. 18) The fifth argument against federalism is the efficiency factor.

It has been noted that many business clearance and forwarding procedures are taking longer to clear because documents are taking longer to clear and certify. Therefore the business fraternity is loosing on precious time and efficient service to their stakeholders. (Twomey & Withers 2007, p. 18) The sixth argument against federalism is the lack of responsibility. Many administrators and officers are taking advantage of the system buck passing is at an all time high. Similarly many process administrators are not sure of their limits of service, creating a lot of conflict.

Overall many business sectors in Australia feel that the government has failed in keeping its end of the bargain despite the massive wealth of resources. (Twomey & Withers 2007, p. 18) Conclusion: Overall, few arguments have been advanced against federalism to business in Australia. The major misgivings are the concepts age verses neo-globalisation advocacy; the democratic stand of the business sector; economic burdens to the regions and government; inefficiency; and responsibility matters. (Twomey & Withers 2007, p. 18).

However, from observations, most if not all of these negative issues can be countered by the positive experiences that the federal system can is flexible on business locations; receptive to new strategies and innovations; flexible to business and cultural diversity; democratic and devolved in policy representation; assure of business operations liberty; spread business risk; propels national competition and finally designs the national economic agenda that can be emulated by other international federal systems competitively. (Walker 2001, p. 35- 41).

This paper has observed that the advantages of federal system to business in Australia overrun the disadvantages. References: Brown, A. J. 2007. Federalism in Australia-new life or old tricks? Australia Broadcasting Corporation. Viewed 28th April 2009 (Online) http://www. abc. net. au/news/stories/2007/02/09/1843993. htm Calabresi, S. (1995). “ ‘A Government of Limited and Enumerated Powers’: In Defence of United States v Lopez”, 94 Michigan Law Review (1995), p. 775. Coghill, K. MLA, 1993. ‘Benefits may be illusory’, The Australian (26th May), p. 10 Grossman, P. 1989. Fiscal Federalism: Constraining Governments with Competition

Perth: AIPP, vi, 31. McGuinness, P. P. 1990. ‘Federalism’s Hypocrites’, The Australian, 31st October. OECD Economic Outlook 66. 1999. (December), Table 28, 220; Parliament of Victoria, 1998. Federal-State Relations Committee, Australian Federalism: The Role of the States, 2nd Report, Parliament of Victoria: Melbourne, p. 9-12. Twomey, A. , & Withers, G. 2007. Federal Paper 1 Australia’s Federal Future: Delivering Growth and Prosperity. A Report for the council for the Australian Federation. Viewed 28th April 2009. (Online) http://www. caf. gov. au/Documents/AustraliasFederalFuture. pdf. Walker, G. de Q.

2001. Ten Advantages of Federal Constitution: An how to make the most out of them. The Centre for Independent Studies. Viewed 28th April 2009 (Online) http://www. cis. org. au/policy/summer00-01/polsumm0001-8. pdf. Walker, G. 1995. ‘The Tribunal Trap’, Australia and World Affairs 8, (Autumn 1991), 53. The High Court restored some legal rigour to this area in Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR245, 69ALJR 191 Wheeldon, J. (Hon). 1997. ‘Federalism: One of Democracy’s Best Friends’. Upholding the Australian Constitution, vol. 8, East Melbourne: Samuel Griffith Society, p. 189.

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The benefits of federalism to business outweigh the disadvantages in Australia. (2016, Jul 29). Retrieved from

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