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ABSTRACTIn the context of a re-examination of the conceptual and political foundations of merit/demerit goods, this paper attempts to identify how far they might take us in understanding, explaining, and providing normative justification for, public sector intervention. If merit/demerit influences are to be discovered in actual policies they must be capable of being isolated, at least at the margin, from other policy influences, such as conventional sources of market failure, pure paternalism, and pressure group activities.

In a reexamination of the conceptual & political foundations of merit/demerit goods, an attempt is made to identify how they might lead to understanding, explaining, & providing normative justification for public sector intervention. If merit/demerit influences are to be discovered in actual policies, they must be capable of being isolated, at least at the margin, from other policy influences, such as conventional sources of market failure, pure paternalism, & pressure group activities. However, access is available neither to sufficiently detailed studies nor to operational models of policy formulation adequate either to predict where one might expect to discover merit/demerit policies at work or to distinguish them from other influences on policy outcomes. 42 References. HA

The theme of this important collection of essays is "Budgeting for Statehood in the Northern Territory". All of the contributors were asked to consider some of the unique aspects of the Northern Territory when studying the budgeting aspects associated with achieving Statehood. Constitutional development lies at the heart of this process.The Draft Constitution During the August 1996 sittings of Parliament in the Northern Territory, an historic occasion occurred with the tabling of the Territory's Draft Constitution. The document was the Final Draft Constitution as prepared by the Northern Territory Legislative Assembly Sessional Committee on Constitutional Development. It was with a great deal of pride that I tabled that historic document. For me, together with a dedicated group of people, it represented a decade's work. The constitutional process towards producing the draft document began in 1985 and drew support from a small group of Territory politicians from both sides of the Assembly, and their support staff. There was widespread community consultation and it was a slow, sometimes tedious, often frustrating process, involving much research, a lot of paper, many public hearings and submissions, and lengthy debate and deliberations within the Committee. In total, the Sessional Committee on Constitutional Development received 141 written submissions and numerous other verbal submissions. The Committee now has a regular mailing list of close to 4000 and produced a number of publications to its credit and has been involved in many related activities. Overall, the process of constitution-making has been an open, democratic process, with maximum opportunity for input by all the community. As Territorians, we are charged not only with writing our own constitution, but also ensuring that the homegrown constitution will also benefit future Territory societies. The Constitution will be required to operate in the interests of all sections of the Territory community and it is obviously important to produce a workable document. The views of all Territorians are important as we move towards Statehood in the year 2001.

A remarkable process of reform of intergovernmental arrangements was initiated in Australia in 1990 designed, according to its proponents, 'to improve our national efficiency and international competitiveness and to improve the delivery and quality of services governments provide'. Unlike previous 'new federalisms' in Australia (and elsewhere) the reform process on this occasion was neither totally unilateral, nor top‐down in design and implementation. Rather, while reflecting the commonwealth (federal) government's frustrations at the limits imposed by the federal system on its political power and administrative capacity, the process intentionally was cooperative, incorporating all state and temtory government leaders, and including representatives of local government. In the context of a review of the origins, nature and objectives of the reform initiative, this article points both to the valuable innovations embodied in its processes, and to the risks of reduced political access and citizen participation created by its attempts to apply 'single‐government' managerialist principles to the redesign of intergovernmental arrangements in federal systems. Political and bureaucratic objectives, combined with a lack of adequate appreciation of federal principles, led, in our view, to an attempt to supplant participatory politics with relatively less accessible and responsive managerial structures.

Examined are the prospects for Australian federalism in terms of constitutional change, judicial review, fiscal arrangements, local government, public policy, & intergovernmental relations focusing on developments since 1977. Attention is given to the continuing vertical imbalance of Australian fiscal federalism, & to Prime Minister Robert Hawke's labor government's recent initiative for a closer working partnership with the states for reforming intergovernmental arrangements. It is argued that while reform of intergovernmental arrangements is possible, there is a greater need for rectification of the imbalances in Australian fiscal federalism. Whereas the 1980s were significant for labor governments working with the federal constitution, the 1990s promise to be a decade of celebrating the centenary of the Australian Constitution & working toward improving the function of its federal system. 3 Tables. Adapted from the source document.