Federalism

• Coordinate federalism


  Early years following Federation
• Coercive federalism


  From mid - late 20th Century
• Cooperative federalism


  21st Century
• The balance of power is the balance of legislative and financial powers between the Federal and State Governments
• The balance of power has shifted in favour of the Commonwealth since federation.
• Factors that have contributed to the shift in balance of power

  • Financial relationship - including HFE & VFI
  • Referral of Powers
  • COAG
  • National Cabinet
  • High Court of Australia
• Financial powers


  • Shifted in the direction of the Commonwealth since Federation driving the VFI and allowing the Commonwealth to dominate the States via s96 grants
  • The only possible exception being the improved cooperation afforded by COAG and now National Cabinet
• Constitutional design


  Commonwealth has exclusive right to tax customs, excise and duties and through design and the High Court, have exclusive access to income taxation
• Commonwealth's financial strength


  Allows them to use s96 tied grants (SPP's) to shift the balance of power in their direction by forcing themselves into residual powers (e.g. health and education)
• National Cabinet (formerly COAG)


  • Provides a framework to give the States a greater say in relation to federal grants
  • CGC ensures grants provided by Commonwealth are given to states in a way that ensures all states can provide equal standard of living
  • These two organs are able to provide states with a greater ability to influence decisions, perhaps pushing the balance of power slightly in their favour
• High Court decisions


  Uniform Tax and Ha & Hammond cases provide Commonwealth with greater access to funds, increasing VFI and through s96 grants, arguably shifting the balance of power further in their favour
• Referral of powers


  • Section 51(xxxvii) makes it possible for States to pass powers to the Commonwealth if they choose to do so
  • A referral of power only affects the referring State
  • Referral of powers are relatively rare because States are protective of their powers
• Referral of powers


  • Referral of State criminal law powers to the Commonwealth to allow for Federal terrorism offences
  • Referral of power to legislate in relation to de facto relationships to the Commonwealth by all states, except WA
• COAG


  • Main body in which the State and Commonwealth governments cooperated to achieve outcomes
  • Increased cooperative federalism and provided a greater avenue for the states to provide their views and ideas
• In June 2020, COAG was formally abandoned to be replaced by the NFRC and its principle organ, National Cabinet
• National Cabinet


  • Replaced COAG as the main forum for intergovernmental discussion
  • The financial powers component of COAG has been transferred to the Council on Federal Financial Relations (a sub-organ of National Cabinet)
  • It is difficult to know if National Cabinet will further or hinder the shift towards a more cooperative federalism we saw under COAG
• During the COVID Pandemic, National Cabinet has provided an avenue for States to raise their concerns and reach agreement on issues like international border closures and quarantine arrangements, but states have also acted autonomously on issues like interstate borders and school closures
• The High Court of Australia has caused significant change to the federal balance since federation - it has almost certainly been the most significant
• High Court decisions on financial powers

  Uniform Tax and Ha & Hammond cases have driven the VFI, increasing the more coercive nature of our federalism
• High Court expansion of Commonwealth power

  Broad interpretations of the external affairs power in sections 51(xxix) and the corporations power section 51(xx)
• Early High Court approach


  Actively defended State powers and limited the powers of the Commonwealth, creating doctrines of interpretation to preserve State sovereignty
• Doctrine of Reserved Powers

  Created to protect the States in areas of Section 51 concurrent powers, interpreting concurrent powers narrowly to preserve State power and limit Commonwealth power
• Doctrine of Implied Immunities of Instrumentalities

  Suggested that States should be immune from Commonwealth interference and the Commonwealth prohibited from interfering in States' residual powers
• Early High Court cases defending State powers

  • Peterwald's Case 1904 - narrowly defined 'excise' to reserve taxing power for States
  • Railway Servants Case 1906 - found Commonwealth industrial laws could not apply to State government railway employees
• Engineers Case 1920


  Overturned the precedent of Railway Servants Case, wiping away the protection of State power provided by the doctrine of implied instrumentalities and immunities
• After 1920, High Court decisions expanded the Commonwealth's power through broad interpretations of the external affairs power and corporations power
• Federalism


  A system of government in which sovereignty is geographically divided between one central and two or more regional governments, each sovereign within their own sphere
• Centralism


  The tendency of Australia's system of power to shift towards the Commonwealth government
• Coordinate federalism


  A federal system in which the two levels of government work independently within their own spheres of power
• Coercive federalism


  A federal system in which the central level of government possesses and exercises significantly more power than the regional governments
• Cooperative federalism


  A federal system in which the two levels of government work together to achieve outcomes
• Section 51


  Lists powers shared by Commonwealth and States
• Section 52


  Seat of government
• Section 90


  Customs and excise taxes
• Section 107


  Powers not mentioned in the Constitution are automatically State powers
• Section 109


  Disputes between Commonwealth and State law are resolved by invalidating part of State law in conflict
• The Commonwealth is not a higher power than the States, it just exercises power in different spheres of authority
• Powers of the Commonwealth

  • A Commonwealth Parliament
  • A federal government
  • Federal courts
• Powers of the States

  • State Parliaments
  • State Governments
  • State Courts
• Types of powers


  • Exclusive
  • Concurrent
  • Residual