Expect a big announcement from Kevin Rudd in the first week of the election campaign about fixing the “blame game” between the commonwealth and the states. Rudd is set to announce a “Commission of Inquiry into Australian Governance” with full royal commission powers, with the states and territories agreeing to refer powers necessary to give it terms of reference that will be wide enough to inquire into any relevant aspect of state or federal governance.

The Commission’s terms of reference will include recommending any necessary changes to the constitution to update the respective roles of the Commonwealth and states. The political appeal of this proposal (and one aspect that has caused some concern amongst more cautious Labor types) is that the Commission’s terms of reference will be broad enough to enable it to look into records of the Howard government which would otherwise be off-limits.

When Rudd was Chief of Staff to Wayne Goss they were given the huge political free-kick of the Fitzgerald Report, which documented the failings of the previous National Party government in embarrassing detail. Rudd and Goss were able to use the Fitzgerald Report as a political stick to beat the opposition with for years to come. Rudd is keen to have something something similar in his first few years that will document the scandals and failures of the Howard government, which can then be used a political weapon for the 2010 election and beyond.

The likely timetable is for the Commission to be set up in early 2008, conduct its inquiries for 12-18 months and then report in early 2010, with its recommendations to then be put to a referendum to coincide with the 2010 election.

Rudd has earmarked Professor George Williams of UNSW for the job of Chairman of the Commission, with a promise that Williams will be rewarded with a spot on the High Court in 2012, when Justice William Gummow retires, but only if the referendum is successful. If it does succeed, Williams is likely to be regarded as Australia’s foremost expert on federal-state relations, and will be able ride into the High Court as “the man who saved the federation”.