Australian Federal System: History, Structure, And Recent Reforms

History of the Australian Federal System


How is this possible given that the Australian Constitution has changed little over the past century?

The country of Australia is fourth among the countries which have very old federation. Australia comes after United States whose federal structure is since 1789, Switzerland whose structure is existing since 1848 and Canada whose structure is existing since 1867. The federal structures of these constitutions have not changed since its composition. It has been over a century that the Australian Constitution has been established and under formal terms not many modifications have been made by the governments (Fenna, 2012). However, the Australian federal systems did undergo a number of changes in the prevailing years. The most significant change that can be observed is the degree in which the Commonwealth Government has gradually taken a very dominant position in the Constitutional structure.

After the Henry Parkes’ Tenterfield Oration in the year 1889, the colonies in Australia carried out a number of constitutional conventions throughout the time period of 1890s. These constitutionals conventions were put together in a draft Constitution that was given for majority votes in each of the colonies and finally the electors approved of a final round of changes to meet the high threshold of support as required in the state of New South Wales (Appleby, Aroney and John, 2012).

In the year 1900 the Imperial Parliament in Britain passed the law as the Commonwealth of Australia Constitution Act 1900. The federation was observed to proceed in a very aimless manner that reflected the lack of any compelling urgency. The colonies attempted to remove the tariff barriers in inter-colonial trade and commerce. These had strategic presence and access to investment capital at lower rates (Selway and Williams, 2005).

With regard to the federal structure of the Australian Constitution it can be observed that the model structure is very similar to the American Constitution (Selway and Williams, 2005). For instance the enumeration of the powers of the Parliament under section 51, the states being a broad residual power given under section 108, the supremacy clause given under section 109, the presence of a strong bicameral structure with the senate where the states represented disregard of any disparities in the population of the state as given under section 7, the division of senators into various cohorts for electoral cycles as given under section 13, the establishment of Supreme Court, the High Court with the power to declare any action of the governments unconstitutional as has been given under the section 71 and the two step amending procedure given under section 128 (Galligan and Wright, 2002).

The federal system of government in Australia has been undergoing a lot of crucial changes. With the recent changes relating to globalization and new methods of governance the questions relating to the existing three tier system of federal structure and how it can adapt the requirements of the integrated economy and also at the main time serve the needs of the variety of communities which is spread over the entire continent.

Structure of the Australian Federal System

In the 1940s, the federal governments used the power of the constitution regarding taxation to take de facto control over many of the policies through financial inducement and pressure. In 1999 the Goods & Services Tax (GST) was established that was collected by the federal government. This was considered to be ‘stealth missile’ with respect to the state governments. Again during the 1920s-1930s and again in the 1990s, the collaborate standardization of the laws were done by the federal and the state governments (Miragliotta, 2012). However, the process was ad-hoc and the mechanisms of Australia remained comparatively very weak and informal throughout.

The Council of the Australian Governments (COAG) is the head of the intergovernmental forum in the country. The COAG comprises of the Prime Minister, State and Territory Premiers and Chief Ministers and the President of the Australian Local Government Association (ALGA) where the chairperson is the Prime Minister. The primary role of the Council of the Australian Governments (COAG) is the promotion of those policy reforms that are of national importance or those reforms that need a co-ordinated action by all the governments of Australia. The meetings of the COAG are according to the requirements generally once or twice a year. However at times they may also meet for four times in a year (Selway and Williams, 2005).

One of the primary achievements of the Council of the Australian Governments (COAG) was the reform agenda that was developed by the Intergovernmental Agreement on Federal Financial Relations (IGAFFR). This reform agenda started from January 2009. This Intergovernmental Agreement on Federal Financial Relations mainly aimed in enhancing the collaborating federalism. This federalism reduced the earlier intricacies relating to the financial relations of the Commonwealth with that if the states and territories. It also aimed at the promotion of more flexibility in the service delivery and also enhances the accountability to achieve the outcomes.

In order to figure out the reform objectives in the year 2011 the Council of the Australian Governments introduced five themes of strategic significance. These themes are related to the intersection of the jurisdictional responsibilities (Miragliotta, 2012). These responsibilities include the long term strategies relating to economic and social participation, secondly the national economy relating to the competitive advantages, thirdly, reforms for a more lively and sustainable environment in Australia, fourthly advanced and suitable health services for all the citizens of Australia and finally bridging the gap between the indigenous tribes of Australia (Appleby, Aroney and John, 2012).

Since the federal structure of the country has been created in the 1901 number of rulings of the High Court have gradually strengthened the law making power of the federal government. According to section 71 of the Constitution of Australia, the High Court has the power to resolve the resolve any disagreements rising between the federal and state governments regarding any law making powers (Fenna, 2012). In case of any challenge regarding any law, the dispute is taken to the High Court for determining whether the Constitution has relevant power to make such laws. If the High Court considers the law to be unconstitutional then that particular law will be considered invalid.

Recent Reforms of the Australian Federal System

Generally the state relies on the federal government to fund a number of activities such as the schools and hospitals but now the federal and state balance has also shifted. A very essential part of the total revenue is made up of the federal funds. According to section 96 of the Australian Constitution the federal government has the power to grant financial support to the states in accordance to appropriate conditions that the federal structure deems fit. They generally give ‘tied’ grants to the state governments which direct the state to how the money should be spent (Fenna, 2012).  

The federal government further influences the different manners in which the areas relating to education, housing, health, and urban development are to be dealt with.

In order to illustrate the role of the High Court is modifying the Australian federalism in the last few decades it is essential that some of the important cases are discussed. To begin with the Tasmanian Dam case of 1983 (Tasmania v Commonwealth, [1983]) is primarily considered (Miragliotta, 2012).

In his particular case an attempt was made by the then ruling power the Hawke Labor government to restrict the State Liberal government from the construction of a dam on the Gordon river that is situated in the southwestern side of Tasmania to generate hydro-electric power (Tasmania v Commonwealth, [1983]). The legislation on this was highly criticized and challenged by the state government of Tasmania as well as the governments of Victoria, New South Wales and Queensland. The challenge was made on the ground that according to the Constitution federal government does not have the power to intervene in such matters (Galligan and Wright, 2002). However, when the case came up to the High Court the Court held that the legislation was valid in accordance to the external affairs and the corporation powers of the Commonwealth. This decision of the High Court was considered by most commentators to be a setback for the federalism in Australia. It was also a failure of the High Court as it failed to maintain appropriate balance between the state and federal structure of the country.

Another case may be mentioned in this regard where the High Court gave a reverse decision in a conflict between the federal and state government. In the recent case relating to Work Choices the facts were that the Workplace Relations Amendment (Work Choices) Act 2005 was substituted with the contemporary system of compulsory industrial arbitration that contains a national scheme based on the individual workplace agreements (Fenna, 2012). This entire system was basically according to the economical and liberal outlook of the Coalition Federal government (Work Choices, [2006]). This legislation was later challenged by quite a few state labor governments and according to them it was not within the powers of the Commonwealth and also because the law attempted to implement an individual work place agreement that was unacceptable by most state governments.  When the case was brought forward to the High Court the Court upheld the previous decision of 2006 and again the court was criticized for putting an end to federalism in the country.

The Role of the Council of the Australian Governments (COAG)

As a result of the decision of the Work Choice case, now the Commonwealth has far more capacity to regulate the different areas of individual activity than that was even expected by those people who had framed and ratified the Constitution (Work Choices, [2006]). These powers are considered by most to be far beyond the powers and scope that was initially given by the Constitution.

However, it should be noted that the importance of the Work Choices case is not in the result of the case but in the fact that the High Court got an opportunity to reconsider the whole approach relating to the legislative powers of the Commonwealth as has been given under the Constitution of Australia (Work Choices, [2006]). After the decision in the Engineers case (Engineers, [1920]), it was first that these issues were raised and the High Court was given a chance to consider whether the previously preserved old doctrines can survive in the court jurisprudence.

Further in another case known commonly as the State Banking Case (State Banking Case, [1947]), the High Court held that the reserved power doctrines that is related to those fields of power that is reserved for the states only and the limitation and scope of this power helps to understand the power that is conferred upon the Commonwealth. However, even then it is seen that the reserve power doctrine is not logical in the full sense.


The Australian Constitution that was envisaged in the year 1901 is hence quite different from the exact manner in which it was prepared. The above high court decisions along with a few others imply that these changes were brought about due to the gradual changes in the outlook and thinking of the people. Therefore even though the Australian Constitution was changed over the last few years due to the fact that a number of reforms took place in contemporary times, the structure of federalism also went through a lot of modifications. As a result the federalism that was envisaged in the year 1901 is quite different from what it is in present times.

However it should also be noted that the existence of uncertainties and discrepancies in the federal systems is quite normal and most of the developed countries such as that of Canada and the United States of America have also witnessed such changes. Australia is no different in this sphere and such changes in federal structure are made keeping in mind the changing societal norms.


Appleby, G., Aroney, N. and John, T. (2012). The future of Australian federalism. Cambridge, UK: Cambridge University Press.

Engineers [1920]CLR 28, p.129.

Fenna, A. (2012). Centralising Dynamics in Australian Federalism. Australian Journal of Politics & History, 58(4), pp.580-590.

Galligan, B. and Wright, J. (2002). Australian Federalism: A Prospective Assessment. Publius: The Journal of Federalism, 32(2), pp.147-166.

Miragliotta, N. (2012). Federalism, Party Organization and the Australian Greens. Australian Journal of Politics & History, 58(1), pp.97-111.

Selway, B. and Williams, J. (2005). The High Court and Australian Federalism. Publius: The Journal of Federalism, 35(3), pp.467-488.

State Banking Case [1947]CLR 74, p.31.

Tasmania v Commonwealth [1983]CLR 158, p.1.

Work Choices [2006]CLR 229, p.1.

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