“The states would get more cash from the Commonwealth for improving student literacy and cutting the number of chronic
disease sufferers under a Steve Bracks plan to overhaul the Federal
Government’s $20 billion specific purpose grants,” The Australianreports today.
“Under the Victorian Premier’s reform agenda, the states would agree to be held
accountable for their performance in education and health in return for the
Howard Government loosening its grip on the grants and increasing the funding
pool.”

Nice idea – but doesn’t it make the states
even less relevant? Maybe not. The Oz‘s leader writers explore the idea further:

The states
correctly complain that Canberra uses the power of the
purse to stick its bib into issues best handled at a local level. And the
national government rightly responds that the states waste money on
bureaucratic failings and implement insane ideas, such as the new curriculum in
West Australian schools, which emphasises left-wing ideology over education…

A new
report commissioned by the Victorian Government … offers some ideas. It proposes
an emphasis on program outcomes instead of the turf wars and cost-shifting that
now characterise commonwealth-state relations. And it argues that because our
federal system is functioning well, compared with comparable countries, we have
more to gain by overhauling the way money is allocated than by replacing the
states with regional authorities. Under the proposal, states would agree to
meet specific targets in education and health and be given the money to get on
with the overall job of running schools and hospitals.

Given
that the report was published by a premier, perhaps this approach is
predictable… Even so, this new report includes ideas that can improve the way our
existing, imperfect system works. And as part of the Bracks Government’s
long-term campaign to kick-start a new round of public sector reform, it should
be taken seriously when Mr Bracks takes it to COAG…

The Australian‘s editorial rightly reminds
us how the National Competition Policy has been “one of the most powerful
engines of our present prosperity… we now need intellectual fuel to fire a new
round of reform”.

Yet the whingeing over competition policy
still echoes around the states. The noise would be deafening once education and
health unions joined in. And state governments surely aren’t deaf to that.