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How government works in Australia
Federal, state & local government responsibilities
Australia was created as a Federation of States in 1901, and has three layers of government - local, state and federal. It can be difficult to understand where the responsibilities of each level of government stop & start as there are some areas in which there seems to be an overlap. The purpose of the table below is to help clarify which level of government is responsible for what.
The funding of health, education and infrastructure is an area in which there may be particular confusion between state and federal responsibilities. The Federal Government collects the bulk of our taxes (income tax, GST) and redistributes it to the states for the funding of health, education and infrastructure. While it is the state government's role to provide efficient services where they are needed, the services are funded by the Federal Government. So both governments may impact the quality of service delivery - ie the efficiency of state government operations as well as the choices made by the state government in where and how to allocate the funds, enabled by the level of funding provided by the Federal Government.
As you know, Australia has a constitution that lays down basic rights and laws for everyone, but each State, like NSW and Tasmania also have their own constitutions that govern how they must operate. Sometimes there may be conflicts between state and federal law, and where this occurs federal law applies.
The table below is a generalised snapshot, and we hope it will assist you in understanding who is responsible for what. Let us know if you want more information on this topic in future updates of the website:
Responsibility | Federal | State | Local |
|---|---|---|---|
Tax & Finance | Income & company tax, GST;
Tax redistribution to fund states;
Pensions & welfare payments;
Custom tariffs on imports; | Land tax, stamp duty (house & car);
Gambling taxes;
Car registration;
Funding to local councils; | Local rates & taxes |
What's in a name?
In 1900 the Australian Constitution declared the name of the federation of Australian states as the 'Commonwealth of Australia'. The word 'commonwealth' was originally derived from a term that means 'for the good of all'. The Australian Federal Government is also called the Commonwealth Government or simply 'The Australian Government'.
