Federalism in Australia

Federalism in Australia

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On 1 January 1901 the Australian nation emerged as a federation
A federation , also known as a federal state, is a type of sovereign state characterized by a union of partially self-governing states or regions united by a central government...

. The model of Australian federalism adheres closely to the original model of the United States of America.

Federal features in the Australian Constitution

Whilst the president
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...

ial system of government and a comprehensive Bill of Rights
Bill of rights
A bill of rights is a list of the most important rights of the citizens of a country. The purpose of these bills is to protect those rights against infringement. The term "bill of rights" originates from England, where it referred to the Bill of Rights 1689. Bills of rights may be entrenched or...

 in Australia were rejected, some of the federal features of the American system were used. These features include a high degree of autonomy for the government institutions of the federation and the states, a division of power between these organisations, and a judicial
The judiciary is the system of courts that interprets and applies the law in the name of the state. The judiciary also provides a mechanism for the resolution of disputes...

 authority to determine whether either level of government had exceeded its powers.

Australia successfully adapted the American concept of state and federal governments possessing separate sovereignty within the framework of a constitutional monarchy
Constitutional monarchy
Constitutional monarchy is a form of government in which a monarch acts as head of state within the parameters of a constitution, whether it be a written, uncodified or blended constitution...

 by establishing the position of state governor to be appointed by the Soveriegn on the advice of the relevant state premier, the Commonwealth Government playing no role in these appointments. This gives each state a direct link with the Crown that completely bypasses Canberra, and can be contrasted with the Canadian
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

 system where provincial lieutenant-governors, appointed by the Governor General on the advice of the federal Prime Minister, were once seen as representatives of the Canadian federal government and not the Soveriegn directly.

Other aspects of the Constitution of Australia
Constitution of Australia
The Constitution of Australia is the supreme law under which the Australian Commonwealth Government operates. It consists of several documents. The most important is the Constitution of the Commonwealth of Australia...

 are associated with the federal principle. Original states have equal representation in the senate. Although this is not an essential element of federation, it reflects the view that states (colonies) should be equal in status.

Development of Australian federalism

Since federation the balance of power between levels of government has shifted from the founding father's vision. The shift has transferred power from State governments to the Commonwealth government. Phases in the development of Australian federalism can be identified.

The first phase may be described as co-ordinate federalism. In co-ordinate federalism the Commonwealth and the States were both financially and politically independent within their own spheres of responsibility.

A factor in the expansion of Commonwealth powers was the growth of defence expenditures which culminated in Australia's involvement in World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...

. After the war, Conservative Commonwealth governments attempted to return to a system of co-ordinate federalism.

However, a system of co-operative federalism developed in the 1920s and 1930s in response to both internal and external pressures. Elements of cooperative federalism included: the establishment of the Australian Loan Council in response to intergovernmental competition in the loan markets; the co-ordination of economic management and budgetary policies during the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...

; and the establishment of joint consultative bodies, usually in the form of ministerial councils.

Tax competition
Tax competition
Tax competition, a form of regulatory competition, exists when governments are encouraged to lower fiscal burdens to either encourage the inflow of productive resources or discourage the exodus of those resources...

 after the start of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

 ended this period of intergovernment co-operation. The constitutional framework on tax
Constitutional basis of taxation in Australia
The constitutional basis of taxation in Australia is based on a group of powers in the Australian Constitution: sections 51, section 90, section 53, section 55, and section 96...

 allowed both the Commonwealth and states to levy taxes. However, in 1942 the Commonwealth introduced legislation to give it a monopoly on income taxes. It did this by providing financial grants to states (using the section 96
Section 96 of the Australian Constitution
Section 96 of the Constitution of Australia permits that the Australian Parliament is able, subject to the approval of the State concerned, to grant financial assistance to any State on the terms and conditions that it sees fit...

 grants power), on the condition that they did not collect their own income taxes. The validity of this scheme was upheld twice in the High Court. Uniform income taxation levied by the Commonwealth became the principal instrument of Commonwealth financial domination and vertical imbalance in the Australian federal system (vertical fiscal imbalance). The system allowed the Commonwealth to intrude into traditional fields of State responsibility by means of specific purpose grants or loans to the States for purposes such as education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...

, health
Health is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...

 and transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...

. Commonwealth-State relations were at an all-time low as in 1975, when the States sought to resist the growing Commonwealth involvement in local and regional affairs.

Following the defeat of the Whitlam government in 1975, Prime Minister Malcolm Fraser
Malcolm Fraser
John Malcolm Fraser AC, CH, GCL, PC is a former Australian Liberal Party politician who was the 22nd Prime Minister of Australia. He came to power in the 1975 election following the dismissal of the Whitlam Labor government, in which he played a key role...

 put into effect a new policy of co-ordinative federalism. The outcome was an agreement between the Commonwealth and the States in which both levels of government agreed to a system of co-operative planning and decision making.

Despite the centralisation of legislative and financial power, there are many areas where federal Parliament lacks the power to regulate comprehensively, even where such regulation might be seen to be in the national interest. This has led State and federal governments to co-operate to create regulatory regimes in fields such as the marketing of agricultural products and competition policy.

The Territories

The place of the Australian Territories within the federal system has been controversial. The power to "make laws for the government" of the Territories, assigned to the Commonwealth Parliament by s 122 of the Constitution, is not confined by any words of limitation. It is generally assumed to be a plenary power, equivalent to the "peace, order and good government" powers of self-government assigned to the States by their own Constitution Acts.

However, the Constitution makes almost no provisions as to the role of the territories within the federation. For example, the Senate was to be composed of equal numbers of Senators from each state. A particularly troublesome matter was whether this excluded territories from participation in the Senate. The issue has now been settled with two seats for each of the mainland territories, the Northern Territory
Northern Territory
The Northern Territory is a federal territory of Australia, occupying much of the centre of the mainland continent, as well as the central northern regions...

 and the Australian Capital Territory
Australian Capital Territory
The Australian Capital Territory, often abbreviated ACT, is the capital territory of the Commonwealth of Australia and is the smallest self-governing internal territory...

, while each of the states has twelve. Two of the three inhabited external territories, namely Christmas Island
Christmas Island
The Territory of Christmas Island is a territory of Australia in the Indian Ocean. It is located northwest of the Western Australian city of Perth, south of the Indonesian capital, Jakarta, and ENE of the Cocos Islands....

 and Cocos (Keeling) Islands
Cocos (Keeling) Islands
The Territory of the Cocos Islands, also called Cocos Islands and Keeling Islands, is a territory of Australia, located in the Indian Ocean, southwest of Christmas Island and approximately midway between Australia and Sri Lanka....

, are represented by the senators and representatives of the Northern Territory. Norfolk Island
Norfolk Island
Norfolk Island is a small island in the Pacific Ocean located between Australia, New Zealand and New Caledonia. The island is part of the Commonwealth of Australia, but it enjoys a large degree of self-governance...

, however, has no representatives in the Senate or the House of Representatives, as it has a higher degree of autonomy than any other part of Australia.

The Northern Territory referendum, 1998
Northern Territory referendum, 1998
A referendum was held in the Northern Territory on Saturday, 3 October 1998, to decide whether the Territory should become a State of the Commonwealth of Australia. The Country Liberal Party government, and its federal counterpart, supported the Yes case. The opposition Australian Labor Party...

narrowly rejected a Statehood proposal for the Northern Territory; a contributing reason is that the Northern Territory would have had only three senators instead of twelve in the Federal upper house.


The Prime Minister of Australia usually holds meetings with the State and Territory Premiers several times each year to coordinate policy and discuss funding. These meetings are called the Council of Australian Governments.