CASE STUDY ON PUBLIC SECTOR MANAGEMENT

QUESTION

Option1. Case Study on Federalism (2500 words, 65% marks)

Date required Close of business 15 May 2012

This essay builds on the work completed in the minor assignment by extending and deepening the analysis provided in the Wanna reading from the minor assignment (build upon the critical essay) see attached reading report.

–        Write an essay on Federalism (define federalism)

–        Use a case study example to support your discussion (I have chosen National affordable Housing see reference attachments)

–        Illustrate, explore, expand on some issues raised and analysis The minimum issues you should cover are

1. Coordination
2. Diffusion of power between commonwealth and other levels of government
3. Financial relations

–        At least 10 researchable references (Refer to bibliography for PSM Unit 1, pg 499 and required readings for each topic in Unit 1) Althaus and Tiernan often quote the relevant reading throughout the Unit notes.

–        Link to Unit 1 Manuals materials and readings

http://www.nsw.ipaa.org.au/Public-Sector-Management-Program-Course-Materials.aspx

–        USE THE MAJOR ASSIGNMENT – ASSESSMENT RESPONSE SHEET FOR THE ESSAY

Essay format (total 2500 words plus or minus 10%)

(Please provide basic/ reasonable explanations no need for high level academic words or tricky interpretations that may cause confusion, simple is best)

This case study is about federalism. The case should illustrate coordination (or lack of it, in which case there is conflict and confusion) between levels of government and the question of which level is responsible. You have to analysed the situation in terms of issues around federalism

–        Introduction 250 words

• Federalism definition

–        Body (Talk about issues applied from the minor assignment and relate to case study 2000 words)

• Heading: Coordination
  • Paragraph 1. Topic Sentence
  • Paragraph 2. Elaborate (analyse in terms of federalism, lack, conflict????)
  • Paragraph 3. Use evidence from literature

• Heading: Diffusion of Power
  • Paragraph 1. Topic Sentence
  • Paragraph 2. Elaborate (analyse in terms of federalism between Commonwealth and other levels of government)
  • Paragraph 3. Use evidence form literature

• Heading:  Intergovernmental Financial Relations
  • Paragraph 1. Topic Sentence
  • Paragraph 2. Elaborate ( analyse in terms of federalism, i.e. Issues; Vertical Fiscal Imbalance VFI, Fiscal centralisation, New COAG agreement and framework for collaboration on policy development)
  • Paragraph 3. Use evidence from literature

–        Conclusion (250 words)

• Sum up federalism

SOLUTION

Introduction

Federalism is a system that creates a classification of authority between the national governments and regional or state governments.

Interpretation of Australian Federalism

Federalism in Australia is going through a serious evaluation and debate to bring about some major institutional reforms in the system. In response to quest for effective, legitimate and effective governance, traditional federalism system of Australia has indeed shown some vital transformations.

Like Canada, Australia has also been a mixed system where co-ordinate parliamentary governments share overlapping functions. The federal governments are forced to co-operate without changing or disturbing its structure. Coordination processes exclusively between the executive branches in Australian federalism through sub-constitutional machinery, which is why this system is often termed as “Executive Federalism”. (Smiley,1987). However, in Australia the Commonwealth government is the dominant authority in its federal system. It occupies authority over major fields of taxation, and therefore state governments are highly dependent on it for general and specific grants. The state governments’ federal powers have always been encroached by the Commonwealth, throughout the Australian federal history. The Commonwealth has been wielding unilateral powers on various policies despite state judicial claims. However, the state governments still manage to put some limits on the Commonwealth with continuous jurisdictions and administrative capacities of the states. State governments may challenge Commonwealth with High Court constitutional provisions or with political challenges through their premiers.

In this article we will discuss how the federal system addresses the governance of affordable housing policies through its existing and changing approaches. We have considered for this article a case study by Basolo, V., and Scally, C.P.2008 on State Innovation State Innovations in Affordable Housing Policy.

Federalism Structure In Australia

Australian federalism is structured as diffusion of powers between the Commonwealth and state governments. However, the authority and influences of both the governments are broadly delineated in different areas, where none is subordinate to other (Craven, G, 2005). Historically, according to the Australian constitution, the Commonwealth was only given limited powers, to let it focus on national issues alone. The states handled the majority of domestic issues and had sole authority in most areas (Atkinson, R. et al., 2010 and Fenna, A. 2007).

In Australia, public housing was a ‘residual power’ that belongs to states. Any authority which is not specifically delegated to the Commonwealth is known as ‘residual state’, which falls to the lap of the state (Aitkin et al. 20010:36). However, post World War II, significant investment was made by the Commonwealth on public housing, which significantly shifted the authority from the state to the Commonwealth (Aitkin et al. 2006:26). However, the Commonwealth did not directly lead the authority, but gained it with the influence of High Court.

Influence of High Court on Federalism

High Court is a ‘boundary keeper’ of federalism (Patapan, H. 1999). Ever since the ‘Engineers Case’ of the Amalgamated Society of Engineers v. Adelaide Steamship Co Ltd., the Commonwealth has largely taken over the authority from the state with the help of High Court jurisdiction (Gelber, K . 2006). The High Court jurisdictions have significantly changed the face of federalism in Australia and have led to stronger centre and over concentration of power.

Considering the case study on separation of power, it is suggested that separation of power at state level can create greater judicial independence at the state level to regain authority over domestic issues. (Alvey, J.R. 2005).

Affordable Housing and Federalism in Australia

Let us analyze the state of affordable housing in Australia taking into consideration a case study by Gurran, N. And et al.2008 on “New directions in planning for affordable housing: Australian and international evidence and implications”. It highlights the following factors that determine change in public housing policie

Australian public policy is putting up a major focus on affordable housing, capability of land using planning to deliver sufficient new housing supply. The affordable housing sector has gained significant attention by the policy makers owing to significant decline in public housing funds over two decades. Therefore, new infrastructure provision, rediscovered supply has become important policy concerns (Lawson, J. and Milligan, V. 2008). Besides, the land using planning is crucially important in delivering new housing supply. If this system does not work efficiently, it can lead to undersupply of new housing compared to demand. It is argued that containment of urban growth, limiting the release of new land for new developments may not help achieving affordability goals (Beer, A., Kearins, B. and Pieters, H. 2007). In order to improve affordability goals with containment, it is also important that sufficient alternative development provisions made.

Public Housing as Commonwealth Policy

The first Commonwealth-State Housing Agreement was signed in 1945. Since then, the power of Commonwealth over public housing has been stronger than that of states. However, the Commonwealth has not been consistent in its commitment to provide sufficient funding for public housing (Atkinson et al. 2010:1). Morris, A. 2010 article shows that the federal government highly ignored public housing between 1975 and 1983. Only in 2007 public housing regained focus of the political agendas and became national agenda under the Rudd Labor government.

Intergovernmental Agreement on Federal Financial Relations

Signing of Intergovernmental Agreement on Federal Financial Relation has improved the federal-state relations. In January 2009, Commonwealth-State Housing Agreement was succeeded by the National Affordable Housing Agreement, which does not require state-funding matching and there is also no time limit for funding.  The new agreement gives the state greater flexibility, imposing lesser conditions. The developments are major reforms to improve the state of affordable housing in Australia, which are more outcome-focussed than in inputs (Wanna, 2007). However, the increase in NAHA funding is not substantial enough and neither of the government and private sector expects any improvement in funding under the new NAHA as well.

Till date, Commonwealth’s perception is that State Housing Authority offers a poor return of investment and if a state is given a sizeable grant, it does not result into any considerable increase in housing. However, Atkinson et al. 2010:12 asserts that the Commonwealth fails to appreciate the rising costs of housing, thus it is not able meet needs of less-empowered tenants. If the State Housing Authority has not been able to offer substantial housing with whatever funding received, the Commonwealth should understand that SHA is only accountable the state and the Commonwealth itself has reduced the state capacity to fund their own work.

State of Coordination in States and the Commonwealth

National Affordable Housing Agreement has further strengthened the intergovernmental coordination to provide for much affordable public housing. As per the National Affordable Housing Agreement, the role of Commonwealth is listed as follows:

1. The Commonwealth will perform the leadership role for national housing and homelessness policy including Indigenous housing policy;
2. Provide for income support and rental subsidies
3. Provide for Competition policy for housing and buildings
4. Coordinate homelessness data collection from States and Territories.

Role of States:

1. Lead the housing and homelessness policy and indigenious policy
2. Be responsible for delivering and administrating housing and homelessness service.
3. Provisions for housing for indigenous people and in remote areas.
4. Land use planning.
5. Financial aid for renters and buyers

(Wanna, J.2007).

As a major step towards federal coordination and cooperation, all Australian governments committed to salient wide-range national reform agenda, at the Council of Australian Governments (COAG) meeting held on 20 December, 2007. Important decisions made at the meeting include agreement to reform the Commonwealth-State funding arrangement. The new arrangements thus made have now shifted the focus of Commonwealth-state funding relationship to outcome-focused from inputs. Now the states and territories enjoy better flexibility in order to deliver services and manage budget in a more rational manner. Provision of incentives to states encourages them and territories to invest in reform and innovation.

Post 2007 elections, the new Commonwealth government committed to reform federalism. It commits to work cooperatively and in collaborations with states with all Australian jurisdictions. States on the other hand have committed to working in coordination with Commonwealth as equal jurisdictions. The progressing inter-governmental association aims to help in delivering quality services across the country (Wanna, J. 2009). In recent years, states and territories have worked successfully to deliver efficient services to community through horizontal cooperation in salient policies of national significances.

Public Governance of Housing sector

It is suggested in the (Milligan, V., et al. 2009) study that governance of the housing sector should be national in approach. It should attract private investors by promoting its scale on the national level. All the government communities should have their roles clearly defined under the national framework. Apart from the government, the coordinating networks should promote interaction and agendas between the policy makers, funders and providers. A high-level multi-stakeholder Affordable Housing Industry Council should assume the role financial and policy advisor to guide the development of the industry. Review and partnership could be one means to foster such collaboration between all governments and non-government agencies.

Diffusion of Powers between Commonwealth and Federal governments

Federal system provides for advantage of distribution of powers among different governments, thereby protecting against over-concentration and abuse of power. It allows a bargain over various issues between the centre government and other political communities.

Every written constitution suggests that regional autonomy, if differs itself from a federal form of federal structure, it an entrenchment. Federalism allows different local political communities to control aspects of their arena without having to persuade a majority at a national level. However, this does not mean that regional autonomy can go threaten the national unity. Federalism offers regional self-governance as an incentive for remaining a part of a union. Regional autonomy is a guaranteed characteristic and condition for federalism.

Talking of federalism and diffusion of power in the context of the Australian Government, we find irregular shift of power from the Commonwealth to the states and the territories.

Renegotiating the Commonwealth-State Housing Agreement, after1945, every three or four years, increased the power of the Commonwealth in gaining intergovernmental agreements and also increased its discretion over state housing policies.

However, in the fourth phase of the CSAH agreement, from Second World War to the present, the federal system displayed several power transfer characteristics. The federal system appeared as a dominant system and managed transfers and international agreements (Carroll, P., 2006).

There has been a trend of concentration of power with the Commonwealth government in Australia. It is reflected in the status of Commonwealth legislative powers because of significant control over finances of the country (McHugh, M., 2007). Federal system leads to automatic potential for high level of cooperation between the Commonwealth and the states and the territories.

John Wanna along with other council of Australian Federation, 2009, explained that federalism can be either horizontal when states and territories are acting together without reference to the Commonwealth. However, states also prefer to refer of their legislative powers to Commonwealth to let all Australia-wide regime in area where Commonwealth authority it lesser. This system is called vertical federal cooperation.

In order to deliver affordable housing services efficiently, the responsibility of the sector should be divided between the three tiers of government and each tier should involve multiple governmental stakeholders (Atkinson et al. 2010:5). SHAs control the housing sector in conjunction with Treasury and Finance. Other departments also contribute to planning of housing developments and providing support and financial aid to tenants.

Intergovernmental Financial Relations

The Commonwealth, under the Commonwealth of Australian Constitution Act 1900 (§81), has powers to grant financial assistance to any state for any purpose, which is deemed as essential and suitable by the parliament. It was only after 1974 that Commonwealth distributed united grants for the first tile on the recommendation of the Commonwealth Grants Commission under Grants Commission Act 1973. The Commonwealth Grants Commission was required to review the finances of the state government for the first time at that time. The basic principles and procedures of fund distribution included allocation of funds on horizontal equalisation basis.

Local Government Act: The act, which was passed in 1976, provided Commonwealth to pay to the states a certain percentage of Commonwealth’s personal income tax revenue. It allocates 30 percent to councils on a per capita basis. Later in 1986, the Local Government (Financial Assistance)  Act was passed. It provided for following features:

• Distributing grants to states and territories on per capita basis.
• Distribution of grants under Financial Assistance Grants within the states, to be determined by State Local Government Finance.
• Distributing grants to councils minimum based Aboriginal communities on population.
• Establishing informal local government bodies like  to distribute grants in remote areas

The act effectively determined the link between Commonwealth personal income tax revenues and total payments made across the local governments. Besides, the act also serves to establish 30 percent per capita allocation to councils as revenues as a safety net.

Government (Financial Assistance) Act 1995: It was passed to make a number of changes like recognition of importance of improving efficiency of councils; importance of enhancing local government efficiency to Aboriginal and Torres Strait Islander communities to reach even the far-off areas and communities, financially; Making provision for reporting on the performance of Act and council , to the parliament; providing for provisions of National Principles for additional criteria for ensuring allocation of funds among councils; and grants for Australian Capital Territory for local government purposes (Worthington, A. And Dollery, B. 2000).

Affordable Housing And Intergovernmental Financial Relationship

Council of Australian Governments has committed to provide through new Intergovernmental Agreement, for an overarching framework Commonwealth’s financial relation with the states and territories. Under this provision, the Commonwealth-State financial relations includes funding of $6.2 billion in a National Affordable Housing SPP. However, it is not substantial considering the ever-rising demand for housing and increasing costs.

Conclusion

Fiscal federalism and fiscal decentralism has been increasing over years. It is a major reform in the Australian federal structure which has contained over concentration of power and allowed finances to be distributed efficiently among states, local governments and councils. Substantial funding and autonomy is important tom promote delivery of affordable housing service. The fact is supported with study that suggests the importance of institutional economics for better financial and administrative performance (Bhajan, G. and Peter, S. 2003).

References:

Alvey, J.R. 2005. The Separation of Powers in Australia: Issues For  the States. Queensland University  of Technology.

Atkinson, R., Berry, M., Dalton, T., Jacobs, R., and Peisker, V. 2010. What future for public housing? A critical analysis. Australian Housing and Urban Research Institute. Swinburne-Monash Research Centre. Available at ( http://www.ahuri.edu.au/publications/download/40561_fr ).

Beer, A., Kearins, B. and Pieters, H. 2007. Housing Affordability and Planning in Australia. Housing Studies, 22 (1), pp. 11-24.

Craven, G, 2005. Federalism and the states of reality, Policy, vol. 21, no. 2, pp. 3-9.

Carroll, P., 2006. Historical trends in policy transfer in Australia. Historical trends in policy transfer in Australia.

Fenna, A 2007, ‘The malaise of federalism: comparative reflections on commonwealth-state relations’, Australian Journal of Public Administration, vol. 66, no. 3, pp. 298-306.

Gelber, K . 2006,. High court review 2005: The manifestation of separation of powers in Australia. Australian Journal of Political Science.

Patapan, H. 1999. Separation of powers in Australia.  Australian Journal of Political Science. vol. 34, issue 3, pp. 391-407.

Gurran, N., Milligan, V., Baker,D., Bugg, L.B., and Christensen, S. 2008. New directions in planning for affordable housing: Australian and international evidence and implications. Australian Housing and Urban Research Institute. Sydney Research Centre.

Lawson, J. and Milligan, V. 2008. International Trends in Housing and Policy Responses. Final Report, AHURI, Melbourne.

McHugh, M., 2007, The Impact of High Court Decisions on the Governance of Australia. Speech delivered at the Hal Wootten Lecture 2007, University of New South Wales.

Morris, A 2010, ‘The lack of a right to housing and its implications in Australia’, Journal of Australian Political Economy, issue. 65, pp. 28-57.

Milligan, V., Lawson, J., Gurran, Phipps, P., and Phillips, R. 2009. Innovation in affordable housing in Australia: Bringing policy and practice for not-for-profit housing organisations together. Australian Housing and Urban Research Institute.

(Wanna, J. 2009).Common Cause: Strengthening Australia’s Cooperative Federalism. Council for Australian Federalism

Worthington, A. And Dollery, B. 2000. The Debate on Australian Federalism: Local Government Financial Interrelationships with State and Commonwealth Governments. Australian Journal of Public

Administration 59(4):pp. 12-22.

KG83

But you can order it from our service and receive complete high-quality custom paper.  Our service offers Management  essay sample that was written by professional writer. If you like one, you have an opportunity to buy a similar paper. Any of the academic papers will be written from scratch, according to all customers’ specifications, expectations and highest standards.”