The Federal Government’s decision last week to provide $45 million a year to a struggling hospital in Devonport is one of the most extraordinary examples of bad public policy I have ever seen.

It seems like the Prime Minister will be wandering around marginal seats across the country to selectively bail out State Government failures. It doesn’t make sense politically (except in Devonport), economically or socially.

I have believed for a long time that health should be a federal responsibility. Howard must think that too if he believes the Tasmanian Government incapable of managing a regional hospital.

The solution then is for the Commonwealth to seek agreement from the States to assume responsibility for their hospitals. There are various financial levers the Commonwealth can use to achieve this objective.

An immediate outcome will be a reduction in administrative duplication. It’s not that I have tremendous confidence in the national public service to be leaner and more efficient, but there is an incredible amount of duplication between the States and Commonwealth, particularly in health.

And yes, if health is taken away from the States, then education may as well become a federal responsibility too. There are not many people who doubt the desirability of a national curriculum. That raises the question of whether we need States at all.

I think there needs to be a level of government between local councils and the Commonwealth, but States are too big and metro-centric.

They increasingly duplicate services with the Federal Government and delegate them to local government. They have outlived their relevance and the Senate is no longer performing the role envisaged by the founding fathers.

A better option, in my view, would be to abolish the States and create new regional authorities based on logical geographic areas.

All federal departments should deliver services on a regional model with local community input through regional councils. Regions would cross existing State borders in many cases.

I consider the future of our Federation a bigger issue and more relevant than the debate over our head of state. One is about symbolism; the other is about governance.

The major parties show little inclination to open up discussion on federalism. Occasionally an elder statesman or retiring politician will concede the sense of it, but nothing serious ever eventuates.

One could be forgiven for thinking there are too many vested interests in retaining the beast of multiple parliaments, politicians and bureaucrats.