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State and Commonwealth Relationship
The Commonwealth of Australia was formed as a federal union on 1 January, 1901 when the six British colonies of New South Wales, Victoria, Queensland, South Australia, Western Australia and Tasmania were united as states in a federation. In addition to the six states, Australia has a number of territories including the Northern Territory and the Australian Capital Territory, which contains the nation’s capital, Canberra.
The Commonwealth Parliament has power to legislate on specific matters of national interest, such as defence, external affairs, overseas trade and commerce, currency and banking. It also has exclusive power to impose customs and excise duties and equal power with the states to levy other forms of taxation. The state parliaments retain power over all matters other than those expressly granted to the Commonwealth under the constitution. In areas in which the Commonwealth Parliament and the states have concurrent powers, Commonwealth legislation prevails.
The states’ powers include control over education, public health, police and justice, transport, roads and railways, industry, mining and agriculture, public works, ports, forestry, electricity, gas and water supply and irrigation.
The Reserve Bank of Australia is the country’s central bank. Under the Reserve Bank Act the central bank has the responsibility of ensuring that its monetary and banking policies contribute to the stability of the currency of Australia, the maintenance of full employment and the economic prosperity and welfare of the people of Australia.
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