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November 3, 2006
This speech, which Dr Ken Henry, Secretary to the Treasury, gave to the 2006 Economic and Social Outlook Conference is worth a read. The section on CoAG is to the point:
The Council of Australian Governments (COAG) has accepted that there is a strong case for addressing long standing policy failures in pricing, competition and competitive neutrality that have prevented the development of national markets in water, energy and other areas of economic infrastructure.
The COAG goals are ambitious and well targeted. But COAG agreements are not the same thing as reform outcomes. To date, progress against commitments has been slow.
The COAG agreements are a product of cooperative federalism. Advocates of cooperative federalism – more numerous among the states than in the Commonwealth, of course – should have a strong interest in the implementation of the COAG agreements since that experience is writing a judgement on the quality of our federal arrangements, and on the strength of the cooperative federalism model. So far, the judgement is not particularly favourable.
Even so, the inadequacy of present market arrangements for water and energy is so apparent today that we can be confident of these areas occupying a position in the mainstream of policy development for some time.
Water has been a disaster. It highlights the flaws in co-operative federalism. We have a boom and our state and federal governments cannot even buy some of the overallocated water licences in the middle of a drought that both reflects, and is superimposed upon, an underlying pattern of climate change.
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