By Lenore Taylor
The wheels seem to be falling off the Council of Australian Governments - supposedly the vehicle for federal-state co-operation - which is unfortunate for the Gillard government, since it needs agreement from the premiers for almost all its big reforms.
Hospital reform, the mining profits tax, water reform, reform of business regulation, the pokies agreement with the independent Andrew Wilkie, even a carbon price (where business will want the states to remove inefficient measures once a national scheme starts) - they all need buy-in from the states.
The Gillard government's problems are not just because the Liberals have won government in Victoria, and - barring divine intervention - also appear set to do so in NSW next year.
Having three conservative premiers isn't helpful from Labor's perspective, but COAG has been languishing for a while now - the last meeting was in April and Gillard will not hold her first until next year - and even the bloke charged with driving COAG reform, Paul McClintock, said this week the process had stalled.
And that was before federal and state leaders had considered the individual, let alone the cumulative, effects of a long list of federal initiatives which reduce the states' ability to raise money.
The states' relationship with the federal government is a bit like teenagers' dealings with their parents: they mainly turn up when they want cash and they always want more.
And like teenagers, they have limited revenue-raising capacity and come nowhere near to earning enough to cover their needs.
My instinct is usually to side with the parents of our great big federal family, but right now there are so many changes proposed to what the states get, what they can earn and what they are allowed to spend it on that it does seem time for a bit of a chat.
First, Kevin Rudd's health reforms took enough of the states' $50 billion annual GST payments (the most important part of their discretionary allowance from the Commonwealth) to boost the federal government's share of hospitals funding in each state to 60 per cent.
From the point of view of patients this financial shuffle was a zero sum game, but from the point of view of the states it was an erosion of financial autonomy even though it meant the federal government was taking on responsibility for a looming budget headache as hospital costs grow. At first they weren't keen and needed to be offered a whole lot of extra money in the short term to be persuaded. Western Australia has still not agreed, the deal has not yet been finalised and legislated and Victoria's new Liberal Premier, Ted Baillieu, is reassessing what was offered to win the support of his Labor predecessor.
As the Treasurer's incoming government ''red book'' from his department said of the health reform (in the beautiful under-statement of the public service) ''significant implementation tasks remain''.
The second money problem between the federal government and the states is the mining resource rent tax.
Newly installed as prime minister and desperate to get the miners off her back Gillard signed an agreement with the three biggest mining companies that promises to pay back to the companies any future rises in state royalties. After the election, faced with the obvious fact that this promise amounted to a blank cheque to state governments - which any parent could see was unwise - the federal government said it hadn't actually meant all royalty increases, but rather just those that were in the pipeline as of May.
Astonishingly the policy transition group that was set up after the election to implement the tax put this issue, which could sink the whole thing, ''to one side''. The government is now drafting legislation that reimburses the states at a standard capped rate - which might get around some tricky constitutional issues, but still means the states won't be able to raise royalties in the future without hurting the miners. The West Australian government is almost certain to launch a High Court challenge anyway.
Third, there's the agreement with Wilkie to entice him to support Labor to form government, which promised gamblers would be forced to ''pre-commit'' what they intend to spend on pokie machines. If even some of what the clubs are saying about the effect on their revenue is correct, this could cost state governments more than $500 million in tax revenue. Here Baillieu is on side, but NSW is less keen.
And on top of all of this the Grants Commission - whose job it is to even things out given the differences in the states' revenue-raising power - is conducting its annual review. The mining states of Western Australia and Queensland are in a state of high anxiety because they think the formula will see them further subsidising the economic slow-lane states.
Oh, and as part of another deal to form government, the Gillard government has promised a tax summit by the middle of next year, at which reform of ''inefficient state taxes'', that is, most of the ones over which they still have control, will be high on the agenda. But an increase in the GST - the one growing revenue source over which the states have control - is not on the table at all. Business groups, tax experts and state governments have all pointed out that this will make it impossible to have a sensible negotiation.
The federal government argues the states are getting a lot more money under a revamp of funding agreed in late 2008, but the West Australians are starting to get almost hysterical about the cumulative effect of the federal assaults on their revenue-raising discretion.
In a speech this week the Premier, Colin Barnett, said the combined effect of the grants commission process and the health package (if he agreed to it) would be for WA to get back just 13¢ for every dollar of GST it collected.
''At that stage, you put a gate on the Eyre Highway and close it off,'' he said.
It would be easy to dismiss the suggestion of secession as the political equivalent of yelling ''I hate you'' and slamming the bedroom door, except that the list of unresolved issues, and the clout of conservative premiers within the federation, is growing.