Coronavirus Australia: Leaders unite to create jobs as new federalism begins

Australia’s federation gets biggest shake-up in almost 30 years as leaders embrace permanent national cabinet.

Scott Morrison during a news conference at Parliament House in Canberra on Friday. Picture: AAP

Australia’s federation will undergo its biggest shake-up in almost 30 years after Scott Morrison and state and territory leaders agreed to embrace a permanent national cabinet and abolish decades of bureaucrat­ic red-tape.

The old, committee-bound Council of Australian Governments, established by Paul ­Keating in 1992, will be swept away in favour of a forum that ­allows leaders to negotiate ­directly with each other and has one central aim: creating jobs.

The national cabinet’s initial focus will be on skills, energy, housing, population and migration, while a separate forum of state and federal treasurers will simplify agreements that deal with $127bn of funds across a range of portfolios.

Treasurers will also discuss tax reforms, with NSW and Victoria expected to push for changes to stamp duty and payroll tax.

“This is a congestion-busting process that will get things done with a single focus on creating jobs,” Mr Morrison said.

Almost 30 separate COAG ministerial forums and councils will be replaced by the National Federation Reform Council, centre­d on the national cabinet.

The Prime Minister and prem­iers agreed at Friday’s national cabinet meeting to abolish COAG, clearing the way for unpreceden­ted changes in governance. The leaders also finalised a $131.4bn funding deal to fund public­ hospitals over the next five years, an increase of $34bn, and funding for cancer-treating immun­otherapies.

National cabinet discussed the next steps in lifting restrictions on business and Mr Morrison acknowle­dged some industries would need government support beyond the September end date for the present stimulus package.

Reserve Bank governor Philip Lowe warned on Thursday that “ending that fiscal support ­prematurely could be damaging” to the economy, while industry groups have urged the extension of the $70bn JobKeeper program.

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“The Reserve Bank may have run out of ammo when it comes, largely, to what they can do on cash rates, but the commonwealth government, in particular, has ­certainly stepped into the breach and we’ve done so significantly and we anticipate that we’ll need to do that for some time,” Mr Morrison said.

“But that doesn’t mean that that requires you to do it in every single measure that we currently­ have out there. We’ve got a lot of flexibility.”

The first national cabinet meeting, convened in March to co-ordinate a response to the looming threat of a coronavirus pandemic, included Mr Morrison and every state and territory leader, drawing comparisons to Robert­ Menzies’s war councils more than seven decades earlier.

The move to abolish COAG and make the national cabinet permanent was publicly backed by South Australian Premier Steven­ Marshall, who lauded its pandemic response.

“Some of the co-operation that we have seen in South Australia following the establishment of the national cabinet with other states and the other territories and, of course, with the commonwealth, has been very advantageous in our good response to the COVID-19 arrangement,” Mr Marshall said.

Former Victorian Labor premier Steve Bracks said a permanent national cabinet was “long overdue”. “(It) will give better effect to co-operative federalism,” he said.

Despite momentum building among federal and state governments to kill off COAG, often mired in division, disagreements remain in the national­ cabinet. Leaders were unable to agree on Friday on a timetable to reopen interstat­e borders.

Mr Morrison said he remained hopeful that commonsense would prevail and states — including Queensland, South Australia and Western Australia — would lift border closures by July. He said he was prepared to allow residents of NSW and Victoria to travel to New Zealand first if they could not travel domestically.

Chief Medical Officer Brendan Murphy said that, although it was too early to determine how ­successful the easing of social ­distancing restrictions had been under stage one of the national cabinet’s COVID-19 recovery plan, data showed the nation was “on track”.

Most states have already moved to stage two of their plans, with West Australian Premier Mark McGowan announcing on Friday that stage three easing of restrictions would begin on June 6 — well ahead of the July timetable. That will allow gatherings of up to 100 people and the resumption of full-contact sports, gyms, galleries, beauty salons, cinemas and more.

Dr Murphy cautioned Australians not to “go silly” as restrictions eased. New public transport guidelines endorsed by the national cabinet allow people to decide for themselves if they want to wear masks. Passengers are advised not to travel if they are unwell, to maintain physical distance from drivers and other people on board, and avoid handling cash.

There are just two people left on ventilators in Australia and about 30,000 coronavirus tests are being conducted daily, with fewer than 20 new cases being identified.

Dr Murphy said he wanted to ensure there were only small corona­virus outbreaks that could be easily controlled, high testing rates and good physical distancing and hand hygiene before consid­ering easing restrictions beyond the three-stage recovery plan.

The last COAG leaders’ meeting was held in Sydney on March 13 to discuss the corona­virus pandemic, unprecedented bushfires, drought, domestic violence and plastic waste.

During the COVID-19 pandemic, the national cabinet will continue meeting fortnightly via video conference but in a normal year would meet once a month. There would be two face-to-face meetings annually.

Federal and state leaders would also meet every year with treasurers and the Australian Local Government ­Association to focus on federation reform.