This chapter provides an overview of the origins, evolution and structure of the Australian federation before describing the impact of the 2008–9 financial crisis on both the national economy and on intergovernmental relations. It argues that while Australia was not adversely affected by the crisis and its immediate aftermath owing to an effective stimulus program and the benefits of an unprecedented resources boom, mounting budget pressures are putting Australia’s highly centralized federal financial system under political pressure. The chapter suggests that in the absence of reform the Australian states are especially vulnerable to declining grants from the federal government. Despite these mounting fiscal pressures the federalism reform process launched in 2014 has been abandoned and there is little political enthusiasm for reform.
Intergovernmental Financial Relations in an Age of Austerity
Edited by Richard Eccleston and Rick Krever
Richard Eccleston, Rob Hortle and Richard Krever
Richard Eccleston, Richard Krever and Helen Smith
This chapter establishes the conceptual and theoretical foundations for the ensuing volume. It summarizes the debates concerning the key features of federal governance before providing an overview of the existing explanations of change in federal systems, with a particular emphasis on the application of new institutionalism to explanations of ‘federal dynamics’. The second section of the chapter focuses on the literature on the impact of financial and economic crises of federal governance before providing an empirical account of the economic impact of the 2008–9 financial crisis on the 12 cases included within the volume. The chapter concludes by outlining how an actor-centred institutionalism is applied to the case studies that follow.