The Beyond Federation group is stepping up a campaign to abolish the states and territories, with the release of a poll showing 78 per cent of respondents are in favour of territory and state laws being incorporated into one set of national laws.
Co-convener, Canberra high school teacher Mark Drummond, says there is a false assumption federalism equates to decentralisation.
The ACT system of government could be a model for a new national government, he says. Mr Drummond believes Australia could save about $50 billion a year if the federal, state and territory governments amalgamated into a new national government operating alongside local governments.
''Many of us in Beyond Federation are supporters of what could be called a decentralised unitary system of government rather than a federal system,'' he said.
"We believe there is a false assumption that federalism equates to decentralisation. What we feel we have in Australia is duplicated centralism.
"You've got a federal government that exercises very centralised control over the state and territory level and a state and territory level that exercises very centralised control over the local level.
''In some sense the ACT is an absolute extreme in that it doesn't even have local government.
"On the other hand it could be viewed as the strongest local government that we have and in some senses a possible prototype of the kind of system of government Beyond Federation thinks we should move to.''
Mr Drummond concedes the campaign faces an uphill battle but points out that premiers often call for the dumping of the states after they leave office.
Last month former prime minister Bob Hawke joined former Queensland premier Peter Beattie to renew calls to scrap the states.
Beyond Federation believes its poll results align with opinion polls over the past decade which indicate support for more Commonwealth involvement and less state and territory involvement in functions such as health and education.
"The transition plan that I would envisage is one in which there would be a gradual amalgamation of laws, government functions, institutions and machinery among the commonwealth, states and territories,'' Mr Drummond said.
"If that were to happen, you'd end up with this fairly hefty national government, a conglomeration of the three levels into one entity.
"You would also have within that, local governments that would remain from the prior arrangement, so you haven't actually abolished states, you've kind of melded them.
"The next basic step would be to strengthen local government so that some of those functions that were previously held at the state level would be shifted to local government although in the case of the ACT it might be more the other way.
"The ACT is a special case and it would be a case of transferring the more national functions like health and education to the national government. The ACT government could strip back to essentially the traditional local government roles which would be a lot of the TAMS [Territory and Municipal Services] functions.''