The more you listen to Question Time these days, the more you realise how the political struggle is shifting to one between the Federal Government and the Labor states.

Afterall, it was the Labor Premiers who brought Mark Latham’s leadership to a head and no less than Paul Keating has been banging on about the dangers of state Premiers becoming too powerful in the overall Labor picture.

Given that the Australian constitution left Canberra as little more than a legislation factory which collects most of the cash but leaves service delivery to the states, it is not surprising that the fourth Howard Government is increasingly focused on bullying the states into following their agenda, be it industrial relations, defamation, health, technical colleges and the list goes on and on.

And so it appears after the past three days. Peter Costello really laid it out to the states when talking to the Sphere of Influence on Sunday. Check out the transcript here. Costello is certainly right that the states are squandering too much money on rising public service wage bills and infrastucture investment is suffering. However, where is the great Federal infrastructure investment program?

Then you had Peter Beattie and Steve Bracks appearing on Lateline last night beating up on Peter Costello for threatening to tear up the GST agreement of 2000 and tell the states where to spend the $35 billion. Check out the transcript here.

All of this makes the following contribution from a respected former journalist and current financial spindoctor quite interesting:

Am I only one of a few who think John Howard ran dead in WA – Peter Costello certainly didn’t help especially by dumping water on the Grand Canal. The Feds are in a better position to argue centralisation of health and education against all ALP states rather than to have to fight one of their own.

CRIKEY: As conspiracy theories go, we’ve heard worse. Afterall former Victorian Treasurer Alan Stockdale told Crikey, his then press secretary, back in 1993 that he didn’t think Jeff Kennett would be too disappointed by John Hewson’s loss. Labor’s Stephen Smith made mention on the ABC during the WA election coverage that he thought there would be bad blood between the WA Libs and the Howard Government because some federal operatives had pushed the canal idea and then Howard and Costello failed to get behind. Could this be a reference to Crosby-Textor?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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