Australia’s State Capacity Assessment Essay (Critical Writing)

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Australia presents an interesting example in terms of its state capacity due to several unique peculiarities. In many ways, the policies and decisions it implements resemble a double-edged sword for Australian citizens. In this context, the Australian federal structure, taxation, and welfare system can provide a sufficient explanation for Australia’s state capacity. Their closer inspection will illustrate the capacity’s size and, thus, the strength of Australia in its ability to accomplish policy goals.

Australia had to focus on the relationship between the national and subnational governments within the federal system, which has developed dynamically over the decades in response to political, economic, demographic, and international changes. A unique feature of the Australian federal model is a relatively high degree of shared functions between governments; in practice, the government and states cooperate in many areas, such as employment, education, transport, health, and law enforcement (Tran et al., 2019). The Australian Constitution defines the Federal Government’s responsibilities, which include trade, defense, foreign relations, and immigration. In turn, governments of the states and territories are responsible for all matters not assigned to the Federal Government. It includes public health services and primary and secondary school education. However, federal law overrides any state law that is inconsistent with it (Tran et al., 2019). This way, the Australian government established a certain degree of decentralization to adhere to democratic principles and diversity without risks to its authority.

This fact partly serves as a reason for the strong position of the Australian Taxation Office (ATO) on the authority scale. According to the OECD (n.d.), Australia has one of the highest tax rates on personal income and corporate profits. It makes the situation for private enterprises less favorable, especially in the case of small ones. The ATO possesses a mandate to collect taxes for the government. Its 2017-18 tax year report showed that almost 90% of all tax liabilities were paid in a timely manner (Australian Taxation Office, 2019). However, small business taxpayers face challenges that are different from other enterprises. Issues such as slow payments, cash flow, access to working capital and finance, workforce management, technological change, and personal circumstances all place a small business taxpayer at a significant disadvantage when faced with one of the largest government agencies. In addition, most debt recoveries occur before the appeal commencement to the Administrative Appeals Tribunal (AAT), causing a final devastating impact on small enterprises.

The last notion regarding Australia’s state capacity concerns its welfare system. In this context, Parsel et al. (2020) define conditionality as “a positioning of welfare as a direct means for the state to change and indeed control the behavior of citizens drawing on welfare” (2). In practice, welfare conditionality has three major analytical components. First, it outlines a set of behaviors that people have to comply with. Second, systems are established to monitor behaviors that are generally only prescribed if they can be monitored. Last, sanctions are imposed for behavioral transgressions. Thus, welfare conditionality is exercising power over approximately 5% of its population, asserting what is right, observing compliance, and punishing for misbehavior (The World Bank, n.d.). Ultimately, it leads to formulating policies that impact marginalized people’s ability to shape life on their own terms.

Australia possesses a solid ability to pursue established goals and policies. Due to its adherence to the principles of democracy and diversification, the Australian government established a federation. Particular states are allowed a small set of responsibilities but still remain greatly dependent on the Federal Government. Regarding taxation, Australia has relatively high tax rates and allows governmental agencies, such as ATO, to intervene in the private sector when needed. Finally, the developed Welfare system allows the Australian government to control the people who have to rely on it. This way, it can both address the issue of income inequality and influence society.

References

Australian Taxation Office. (2019). . Web.

OECD (n.d.). . OECD Data. Web.

Parsell, C., Vincent, E., Klein, E., Clarke, A., & Walsh, T. (2020). . Australian Journal of Social Issues, 55(1), 4-12. Web.

The World Bank. (n.d.). . Web.

Tran, C., Kortt, M., & Dollery, B. (2019). . Local Government Studies, 45(5), 632-653. Web.

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