Issue
The Commonwealth Parliament’s power and relationship with
other levels of government is inherently complex. Though it can only legislate
in some areas, the Commonwealth can lead debate, influence policy or exercise
financial dominance to drive change in others. Understanding these
opportunities and constraints is important in determining how desired policy
outcomes can best be achieved.
Key points
- The
Constitution provides the ultimate legal statement of Australia’s federal
structure. It grants the Commonwealth Parliament certain powers and sets out
relevant limits and guarantees.
- The
states retain broad legislative powers but Commonwealth laws prevail where
inconsistencies arise.
- Given
its financial dominance, the Commonwealth may influence state policy or
actions through financial grants.
- Beyond
its legislative powers, the Commonwealth may influence national policy across
jurisdictions through Australia’s cooperative federal relations system.
Context
Australia’s federal structure commenced in 1901
when the former colonies united under the Constitution
and a central Commonwealth Government. Commonwealth, state and territory government
roles and responsibilities are partly prescribed by the Constitution, with the
remainder a complex mix of convention, agreements, legal precedents and
politics.
The Constitution sets out, in varying degrees of detail, the
structure of the Commonwealth Parliament, the legislative powers of Parliament,
the Commonwealth executive, judicial and financial structures and powers, as
well as the relationship between the Commonwealth and the states. Under our
constitutional system the executive branch, under the Governor-General, is
drawn from and is responsible to the parliamentary branch, while the judicial
branch remains separate.
Powers of the Parliament
Unlike the states’ broad plenary legislative powers, the Constitution
(predominantly section
51) gives the Commonwealth Parliament only certain specified legislative
powers. Some of these are exclusive to the Commonwealth (such as those relating
to customs duties, defence or Commonwealth places) while others remain
concurrent, or shared with the states.
The High Court has typically adopted a broad
interpretation of the Parliament’s powers. In this context, certain powers may
now have a wider scope than initially anticipated, notably:
-
the corporations
power, which supports much of Australia’s industrial relations law
-
the external
affairs powers, which supports significant elements of Australia’s
environmental and human rights legislation.
Importantly, a valid Commonwealth law will always prevail
over an inconsistent state law, to the extent of that inconsistency (under section
109).
Determining a legislative provision’s constitutionality
often involves significant complexity and consideration of its terms and effects.
Accordingly, careful deliberation on the constitutional basis of proposed
legislation should occur on a case-by-case basis, with the High Court being the
ultimate authority for deciding such questions.
Limitations and guarantees
The Constitution contains limitations and guarantees on the Commonwealth’s
exercise of powers. While not providing for personal rights and freedoms (analogous
to the United States Constitution), it does explicitly constrain some
Commonwealth and state legislative powers through provisions such as:
- Section
116, which limits the Commonwealth’s power to make laws regarding religion.
- Section
117, which prevents the states imposing discriminatory laws on each other.
Additionally, the High Court has found the Constitution, and
the system of government it establishes, implies other limitations and
guarantees. These include freedom
of political communication, separation of judicial from executive and
legislative powers, and the doctrine of limited intergovernmental immunities.
Political communication
The High Court has held the Constitution implies
a freedom of political communication, as a necessary part of our
representative and responsible government. However, this freedom is not a
personal right but a limitation on legislative or other government power.
Notably it is also not an absolute limitation on legislation that may burden
the freedom, but may allow for limitations that satisfy certain thresholds such
as being a proportionate response to a legitimate policy goal.
Separation of powers
The separation
of powers doctrine has evolved into an important aspect of democratic
governments. It divides government into legislative, executive and judicial
branches to provide a series of checks and balances on the exercise of power.
Australia’s Constitution and system of responsible
government includes some overlap between the legislative and executive
branches. This occurs through the executive, under the Governor-General, drawn
from elected parliamentarians, who are dually responsible to Parliament and
voters. In this way our Parliament may hold the executive branch to account to
a certain extent through questions, votes and committees. In contrast, the
separation between the functions of the judicial branch and the other branches
remains distinct and important.
Intergovernmental immunities
Intergovernmental
immunities are an important limiting principle under the federal system to
ensure the Commonwealth and state governments can exist as independent
entities. The doctrine, set out in the Melbourne
Corporation case and further
developed since, states that neither the Commonwealth nor state governments
can significantly interfere, through legislation or executive action, with each
other’s existence or operation as governments.
Other levels of government
The territories
Under the Constitution (section
122) the Commonwealth can legislate for the government of the territories. This
power remains despite the Commonwealth having passed self-government Acts for
each of the mainland territories to make and administer their own laws.
The states
The Constitution (sections 107
and 108)
preserves the state governments’ broad powers to legislate and govern. These
powers remain subject to the Constitution and subordinate to any valid
Commonwealth laws on the same matters (under section
109). State constitutions are also recognised in and subject to the
Constitution (under section
106).
Local government
The Constitution makes no mention of local government, which
is provided for under respective state legislation. Commonwealth relations with
local governments, and its funding of them for certain purposes, is supported
by constitutional heads of power relevant to those purposes or is done through
the states as tied grants.
The Parliamentary Education Office also provides a further detailed
summary of the three levels of Government in Australia and their respective
powers and responsibilities.
Grants to states and the vertical fiscal imbalance
Over time the Commonwealth has developed a comparatively disproportionate
share of the national revenue capacity. This is largely due to the
Commonwealth’s broad taxation powers and their interpretation by the High
Court, along with the fact that as the Commonwealth legislates more broadly in
an area it shares with the states it leaves less scope for the states to
legislate. When combined with states’ large service delivery requirements (such
as health and education), this ‘vertical
fiscal imbalance’ creates a high degree of financial dependence. Accordingly,
the Commonwealth can exert financial leverage over state policy, beyond the
scope of its enumerated constitutional heads of power.
This fiscal imbalance is primarily addressed through the
Commonwealth’s ability to make conditional payments to the states under section
96. This section provides the Commonwealth with the power to grant financial
assistance to a state on ‘such terms and conditions as the Parliament thinks
fit.’
In addition to the many smaller grants that may be made to
the states under section 96 or other specific heads of power for specific
purposes, the Commonwealth, states and territories have developed a Federal
Financial Relations (FFR) system. This system includes joint funding agreements
and GST revenue sharing arrangements that account for a significant amount of
government spending at both Commonwealth and state and territory level.
Cooperative federalism
Beyond its legislative powers, the Commonwealth may
influence national policy across the states and territories through a process
known as cooperative federalism. This process involves the Commonwealth, state
and territory governments working together through intergovernmental forums to
develop policies and/or legislative responses to issues of cross-jurisdictional
importance or responsibility.
Australia’s current cooperative
federal relations system includes:
These mechanisms
are important in developing nationally coordinated responses to issues falling
outside a singular responsibility. Such responses can range from determining
broad policy settings, including through harmonising laws in various
jurisdictions or adopting identical model legislation, to cases where states
refer specific legislative powers to the Commonwealth and accept a single
national law.
However, gaining
agreement across the various stakeholders and governments is often not simple
or fast. In some cases consensus may be impossible, leading to reforms being
unevenly adopted across jurisdictions.