Federalism in Australia

From Freepedia

On 1 January 1901 the Australian nation emerged as a federation. 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 presidential system of government and a comprehensive Bill of Rights were rejected, the federal features of the American system that were followed 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 authority to determine whether either level of government had exceeded its powers.

There are other aspects of the Constitution of Australia which reflect a federal nature. Some of these are concerned with ensuring that the federal Commonwealth behaves fairly to each State whilst others are provisions relating to the respect and fairness owed by a State to other States.

Another feature of the Constitution which has been closely associated with the federal principle is representation in the Senate. Although an upper House of equal representation is not an essential element of a federation, it reflects the union of the original colonial communities which were co-equal in status.

Development of Australian federalism

The balance of power between levels of government as envisaged by the founding fathers of the Australian Constitution no longer applies. That balance has shifted for the most part, from the State and Local governments to the Commonwealth government. It is possible to distinguish phases in the development of Australian federalism.

The first of these may be described as co-ordinate federalism, in which the Commonwealth and the States were both financially and politically independent within their own spheres of responsibility. A major factor in the expansion of Commonwealth powers was the growth of defence expenditures which culminated in Australia's involvement in World War I.

Conservative Commonwealth governments after the war attempted to return to a system of co-ordinate federalism. In response to internal and external pressures, however, a system of co-operative federalism developed during the 1920s and 1930s. Elements of this 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.

The system of intergovernmental co-operation did not long survive the tax competition which occurred after the start of World War II. In 1942 the Commonwealth introduced legislation which effectively gave it a complete monopoly of income taxes. After the States unsuccessful challenged the validity of the legislation, uniform income taxation became the principle instrument of Commonwealth financial domination and vertical imbalance in the Australian federal system. The system allowed the Commmonwealth 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. 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, Prime Mininster Malcolm Fraser 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.