For reasons to do with geography the Australian Championship is held every 2 years. Since 1971 the Australian Open has been held in intervening years, but of late has been in a steady decline. So much so that I think the ACF should dispense with it.
The major reason why I think it is finished is that it no longer serves a purpose. Indeed the "Australian Open" as a title only served to add some gravitas to what is essentially a big multi-day swiss that attracts some overseas titled players. If there hadn't been a Lidums tournament in 1971, then I suspect the title would not have existed.
These days the "big international swiss" events are the Sydney International Open and the Doeberl Cup. They now successfully cater to the market that the Australian Open used to have, leaving the Australian Open without a purpose. The two things the Australian Open still has in it's favour are (a) continuity and (b) a rotating venue. The importance of (a) (in theory at least) is that as long as there is an ACF there should be an Australian Open. However I think that is a tenuous claim at best, as the ACF have always had a hands off approach to organising it, instead relying on others to do the work instead. As for (b) while this provides the opportunity for different states/cities to host an international event (rather than just Sydney/Canberra with the SIO/Doeberl), again recent practice has shown an unwillingness for states to bid for this event (eg most bids have come from non state association organisers rather than the state associations themselves).
So once you strip away the more historical justifications for such an event, then there seems little reason for holding it.
The Australian Championship on the other hand still fulfills an important roll. However (and this may be heresy to some) it isn't to determine the "Champion" player of Australia. Instead it is probably the only restricted swiss in the country that brings some (but not all) of the leading players together, while providing a springboard for the next group down (sub 2300) to make their mark. Of course having the tournament billed as the "Australian Championship" is essential for this to work, as it provides inducement for the top players to play. Of course this state of affairs isn't a bad thing, although it would be nice if more of the top players decided to play (see Pt 1).
This leads me to a suggestion regarding the Championship and Open. (1) Drop the Open completely (2) Make the championship an annual event (finally) by (a) keeping the championship format the same for the years it is currently held and (b) institute a 10 player RR every other year.
Of course one obvious objection to 2b is funding. If sponsorship attempts are unsuccessful (as they normally are), running an Open along side it seems to be an obvious alternative. The question then becomes one of budgeting ie would an Open/Reserves generate enough income to support a Championship.
The other objection is who gets to play in a RR, but frankly, any chess administrator who thinks such a problem is too difficult to solve clearly isn't interested in finding a solution in the first place.
So is such a suggestion practical. Well the canning of the Open wouldn't take much work (as indeed there are no bidders for the 2009 edition anyway), but would an organiser be able to set up a decent replacement. Frankly I'm not sure. There are some organisers who could do it once but for such a solution to work properly the ACF (yes this is the ACF's issue) needs to have in-house expertise to do this year after year. Does the ACF currently have this expertise? No. Will it have it in the future? It very well may depend on the outcome of their review into the Championship/Open
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