Federalism was adopted, as a constitutional principle, in Australia on 1 January 1901 – the date upon which the six self-governing Australian Colonies of New South Wales, Queensland, South Australia, Tasmania, Victoria, and Western Australia federated, formally constituting the Commonwealth of Australia. It remains a federation of those six "original States" under the Constitution of Australia.
Australia is the sixth oldest surviving federation in the world after the United States (1789), Mexico (1824), Switzerland (1848), Canada (1867), and Brazil (1891).
Relatively few changes have been made in terms of the formal (written) constitution since Australian federation occurred; in practice, however, the way the federal system functions has changed enormously. The most significant respect in which it has changed is in the degree to which the Commonwealth government has assumed a position of dominance.
Instigated by Henry Parkes' Tenterfield Oration of 24 October 1889, the Australian Colonies conducted a series of constitutional conventions through the 1890s. These culminated in a draft Constitution that was put to popular vote in the individual colonies, and eventually approved by the electors, after a final round of changes met the higher threshold of support required in New South Wales. It was then passed into law by the Imperial Parliament in Britain as the Commonwealth of Australia Constitution Act 1900, finalising the process of the Federation of Australia.
The rather desultory way in which federation proceeded reflected the absence of compelling urgency. The colonies saw some advantage in removing tariff barriers to inter-colonial trade and commerce, having a greater strategic presence, and gaining access to investment capital at lower rates; individually, though, none of these represented a driving force.Taken together with the emergence for the first time of a distinct sense of Australian national identity, however, they were collectively sufficient. This lack of urgency was also reflected in their desire to create a minimally-centralised union.
In its design, Australia's federal system was modelled closely on the American federal system. This included: enumeration of the powers of parliament (s. 51) and not those of the States, with the States being assigned a broad 'residual' power instead (s. 108); a 'supremacy' clause (s. 109); strong bicameralism, with a Senate in which the States are equally represented notwithstanding great disparities in population (s. 7); the division of senators into different cohorts on alternating electoral cycles (s. 13); the establishment of a supreme court empowered to declare actions of either level of government unconstitutional, the High Court of Australia (s. 71); and a complex two-step amending procedure (s. 128).
Since federation, the balance of power between levels of government has shifted substantially from the founders' vision.The shift has transferred power from State governments to the Commonwealth government. While voters have generally rejected proposals to enhance the Commonwealth's authority through constitutional amendment, the High Court has obliged, with generous interpretation of the Commonwealth's enumerated powers. A major factor has been the way the Commonwealth government has monopolised access to the main revenue sources.
For the first two decades, Australian federalism stayed reasonably true to the "co-ordinate" vision of the framers.In co-ordinate federalism, the Commonwealth and the States were both financially and politically independent within their own spheres of responsibility. This was reinforced by the High Court, which in a number of decisions in those early years rejected Commonwealth government attempts to extend its authority into areas of State jurisdiction.
A factor in the expansion of Commonwealth powers Australia's involvement in the First World War. The turning point really came, though, with the High Court's decision in the 1920 Engineers Case, Amalgamated Society of Engineers v Adelaide Steamship Co Ltd, repudiating its early doctrines that had protected the co-ordinate model and the place of the States in the federation.
A system of co-operative federalism began to emerge 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; and the establishment of joint consultative bodies, usually in the form of ministerial councils.
A second turning point came with the threat to Australia at the beginning of the Second World War and the Commonwealth government's mobilisation of financial resources. The constitutional framework on tax 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 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, health and transport. Extensive use of these 'tied grants' by the Labor Government 1972–75 provided a "work-around" solution for the Australian Labor Party's long-standing frustration with the obstacles of federalism. It thus helped diminish Labor's antipathy to the federal system in Australia.
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.
Over the years Australia has developed an increasingly comprehensive system of horizontal fiscal equalisation (HFE) aimed at ensuring that all jurisdictions have the same fiscal capacity in relation to their needs. Since 1933, a statutory agency of the Commonwealth government, the Commonwealth Grants Commission, has been responsible for determining the way transfers are distributed among the States and Territories to accomplish this goal. Since 2000, the net revenue of the GST, a national value-added tax, has been distributed as general purpose payments according to a strict levelling formula determined by the Grants Commission. Discontent with this arrangement led to a review inquiry in 2012.
The reliance of the States on financial transfers from the Commonwealth, the high degree of "overlap and duplication", and the resulting policy conflict and confusion between the levels of government regularly generates criticism and calls for "reform of the federation".The Rudd Labor government launched a series of reforms in 2009 designed to reduce the micromanaging character of specific purpose payments. Most recently, the Abbott Liberal-National Party Coalition government commissioned a White Paper on the 'Reform of the Federation'.
In addition to the States, Australia has a number of Territories. Two of those are self-governing: the Australian Capital Territory (ACT) and the Northern Territory (NT). The rest are administered by the Government of Australia. All are constitutionally under the authority of the Commonwealth parliament. 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 by allocating six seats to each of the mainland territories, the Northern Territory and the Australian Capital Territory, while each of the states has twelve. Two of the three inhabited external territories, namely Christmas Island and the Cocos (Keeling) Islands, are represented by the senators and representatives of the Northern Territory. Norfolk Island, 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 of 1998 narrowly rejected a statehood proposal for the Northern Territory. Admission of the Territory as a new State raises difficult questions about how much representation in parliament would be accorded a jurisdiction with such a small population.
In response to the increasing overlap between the two levels of government, Australian federalism has developed extensive practices of intergovernmental relations.At the peak of these are formal meetings between the Prime Minister, the premiers of the States, the Chief Ministers of the two self-governing Territories and the president of the Australian Local Government Association. In the early 1990s, those meetings were formalised as the Council of Australian Governments (COAG). With the onset of the COVID-19 pandemic, the formal processes of COAG were set aside in favour of more frequent, immediate and collegial meetings of the heads of government christened "National Cabinet".
In 2005, the State and Territory governments established their own peak body, the Council for the Australian Federation (CAF), modelled on the Council of the Federation in Canada.However, CAF was active for only a few years and has fallen into disuse.
Federalism is a mixed or compound mode of government that combines a general government with regional governments in a single political system. Its distinctive feature, first embodied in the Constitution of the United States of 1789, is a relationship of parity between the two levels of government established. It can thus be defined as a form of government in which powers are divided between two levels of government of equal status.
A federation is a political entity characterized by a union of partially self-governing provinces, states, or other regions under a central federal government (federalism). In a federation, the self-governing status of the component states, as well as the division of power between them and the central government, is typically constitutionally entrenched and may not be altered by a unilateral decision of either party, the states or the federal political body. Alternatively, a federation is a form of government in which sovereign power is formally divided between a central authority and a number of constituent regions so that each region retains some degree of control over its internal affairs.
The Parliament of Australia is the legislative branch of the government of Australia. It consists of three elements: the Crown, the Senate and the House of Representatives. The combination of two elected chambers, in which the members of the Senate represent the states and territories while the members of the House represent electoral divisions according to population, is modelled on the United States Congress. Through both chambers, however, there is a fused executive, drawn from the Westminster system.
The High Court of Australia is Australia's apex court. It exercises original and appellate jurisdiction on matters specified within Australia’s Constitution
A state government is the government of a country subdivision in a federal form of government, which shares political power with the federal or national government. A state government may have some level of political autonomy, or be subject to the direct control of the federal government. This relationship may be defined by a constitution.
Australian constitutional law is the area of the law of Australia relating to the interpretation and application of the Constitution of Australia. Several major doctrines of Australian constitutional law have developed.
The Australian Government, also known as the Commonwealth Government, is the national government of Australia, a federal parliamentary constitutional monarchy. Like other Westminster-style systems of government, the Australian Government is made up of three branches: the executive, the legislative, and the judicial.
The Federation of Australia was the process by which the six separate British self-governing colonies of Queensland, New South Wales, Victoria, Tasmania, South Australia, and Western Australia agreed to unite and form the Commonwealth of Australia, establishing a system of federalism in Australia. The colonies of Fiji and New Zealand were originally part of this process, but they decided not to join the federation. Following federation, the six colonies that united to form the Commonwealth of Australia as states kept the systems of government that they had developed as separate colonies, but they also agreed to have a federal government that was responsible for matters concerning the whole nation. When the Constitution of Australia came into force, on 1 January 1901, the colonies collectively became states of the Commonwealth of Australia.
Amalgamated Society of Engineers v Adelaide Steamship Co Ltd, commonly known as the Engineers case, was a landmark decision by the High Court of Australia on 31 August 1920. The immediate issue concerned the Commonwealth's power under s51(xxxv) of the Constitution but the court did not confine itself to that question, using the opportunity to roam broadly over constitutional interpretation.
The Council of Australian Governments (COAG) was the primary intergovernmental forum in Australia from 1992 to 2020. Comprising the federal government, the governments of the six states and two mainland territories and the Australian Local Government Association, it managed governmental relations within Australia's federal system within the scope of matters of national importance.
The legal system of Australia has multiple forms. It includes a written constitution, unwritten constitutional conventions, statutes, regulations, and the judicially determined common law system. Its legal institutions and traditions are substantially derived from that of the English legal system. Australia is a common-law jurisdiction, its court system having originated in the common law system of English law. The country's common law is enforced uniformly across the states.
The reserved powers doctrine was a principle used by the inaugural High Court of Australia in the interpretation of the Constitution of Australia, that emphasised the context of the Constitution, drawing on principles of federalism, what the Court saw as the compact between the newly formed Commonwealth and the former colonies, particularly the compromises that informed the text of the constitution. The doctrine involved a restrictive approach to the interpretation of the specific powers of the Federal Parliament to preserve the powers that were intended to be left to the States. The doctrine was challenged by the new appointments to the Court in 1906 and was ultimately abandoned by the High Court in 1920 in the Engineers' Case, replaced by an approach to interpretation that emphasised the text rather than the context of the Constitution.
The constitutional basis of taxation in Australia is predominantly found in sections 51(ii), 90, 53, 55, and 96, of the Constitution of Australia. Their interpretation by the High Court of Australia has been integral to the functioning and evolution of federalism in Australia.
Section 51(xxxvii) of the Constitution of Australia is a provision in the Australian Constitution which empowers the Australian Parliament to legislate on matters referred to it by any state. As Australia is a federation, both states and the Commonwealth have legislative power, and the Australian Constitution limits Commonwealth power. Section 51(xxxvii) allows for a degree of flexibility in the allocation of legislative powers.
The politics of Australia take place within the framework of a federal parliamentary constitutional monarchy. Australia has maintained a stable liberal democratic political system under its Constitution, one of the world's oldest, since Federation in 1901. Australia is the world's sixth oldest continuous democracy and largely operates as a two-party system in which voting is compulsory. The Economist Intelligence Unit rated Australia a "full democracy" in 2019. Australia is also a federation, where power is divided between the federal government and the states and territories.
New South Wales v Commonwealth is a landmark decision of the High Court of Australia, which held that the federal government's WorkChoices legislation was a valid exercise of federal legislative power under the Australian Constitution. In essence, the majority found the Constitution's corporations power capable of sustaining the legislative framework, while the conciliation and arbitration and territories powers were also seen as supporting parts of the law. Furthermore, the majority also held that the legislation permissibly limited State powers and did not interfere with State constitutions or functioning. A minority dissented.
The Constitution of Australia is a written constitution that is supreme law in Australia. It establishes Australia as a federation under a constitutional monarchy and outlines the structure and powers of the Australian government's three constituent parts, the executive, legislature, and judiciary.
The fiscal imbalance in Australia is the disparity between the revenue generation ability of the three levels of governments in Australia relative to their spending obligations; but in Australia the term is commonly used to refer more specifically to the vertical fiscal imbalance, the discrepancy between the federal government's extensive capacity to raise revenue and the responsibility of the States to provide most public services, such as physical infrastructure, health care, education etc., despite having only limited capacity to raise their own revenue. In Australia, vertical fiscal imbalance is addressed by the transfer of funds as grants from the federal government to the states and territories.
The National Transport Commission (NTC), previously known as the National Road Transport Commission, is an Australian statutory body created to develop regulatory and operational reform for road, rail and intermodal transport.
Deakin v Webb was one of a series of cases concerning whether the States could tax the income of a Commonwealth officer. The High Court of Australia overruled a decision of the Supreme Court of Victoria, holding that the States could not tax the income of a Commonwealth officer. This resulted in conflict with the Privy Council that was ultimately resolved by the passage of Commonwealth law in 1907 to permit the States to tax the income of a Commonwealth officer. The constitutional foundation of the decision was overturned by the subsequent decision of the High Court in the 1920 Engineers' Case.
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Federalism in Australia