Since examining South Australia’s ‘bank tax’, there have been three more occasions where states have gone on the attack against the state of the federation, each more attention-grabbing than the next. The first salvo came from the WA Liberals, with their leader Mike Nahan stating that the party was considering legal action against the federal government over the way GST has been distributed. This unusual suggestion caused a slight ripple, but seems in hindsight more like a portent of something bigger to come. Secondly came the Victorian government, who flat-out demanded an extra $420 million to account for population growth on the back of arguing that Western Australia had actually been a net beneficiary of federal grants since federation. Finally, the WA Liberals returned with a bigger, though watered-down, warning, passing a motion to examine the feasibility of seceding from the commonwealth.
Other than attempting to give us the truly awful non-word ‘WAxit’, what is the logic behind these actions, and what is the Australian government planning to do about it?
This week found Jay Weatherill, the Premier of South Australia, once again attacking Australian banks, this time on the back of the Commonwealth Bank recording a nearly $10 billion profit, while being accused in the same week of money laundering. Weatherill’s aggression towards the banking sector comes during his government’s campaign to get a new bank levy through the state parliament, just as the federal government did earlier in the year. Unlike the federal levy, which had near unanimous political support, this state levy is being opposed by the state opposition and Nick Xenophon’s party, while the banks are in a far greater state of discontent than they were when the federal levy was introduced.
The final results are in for the Western Australian state election, an election in which conventional political wisdom was meant to return in full. Instead, it decided that it quite enjoyed being on holiday and just kind of phoned it in, delivering Labor not just a win – like it was supposed to – but one of the most crushing victories in Australian electoral history.
For all the battering that received political wisdom got in 2016, it still has its uses.
The lead-up to the Western Australian state election has felt a bit like going back in time, all the way back to a decade ago. Then, as now, state politics are less important than they used to be, with the federal government vacuuming up revenue and powers from the states, leaving them on the edge of irrelevance. But one effect of this is that federal politics has come to an almost complete standstill, with the sheer numbers of important issues piling up, and the capacity of any government to make changes in any of them decreasing. This, however, has freed up state politics to continue being about ‘the issues’ (mostly), even though the importance of those issues is not as great as it used to be.
The Australian government has been in a state of paralysis for some time, across both major parties, because any real movement one way or the other on the vast array of ‘big issues’ it can now legislate on is likely to be met with absolute fury and, therefore, a loss at the next election, which always seems just around the corner – particularly in the modern, worldwide political environment, which is happy to throw the established order of things out the window. At state level, though, ‘big issues’ are no longer at play. The kind of things that are driving people to vote against the liberal order in national elections are not able to do the same as state level, because the states aren’t really able to do much about it. Conventional wisdom is therefore thrown a lifeline at this election which, I must admit, makes it a bit less interesting, but without the dull elections we wouldn’t be able to tell when a truly extraordinary election is taking place.