Australia’s system of government is a federal parliamentary democracy. Its institutions and practices reflect British and North American models but are uniquely Australian. Australia has three levels of government: Federal, State and Local.

The Australian Constitution establishes the form of the federal government and sets out the basis for relations between the Commonwealth and the States.

Australia has six states (Victoria, New South Wales, Queensland, Western Australia, South Australia & Tasmania) and two territories (the Northern Territory & Australian Capital Territory). The national capital is Canberra, which is located in the Australian Capital Territory.

The Commonwealth Parliament has power to legislate on specific matters of national interest, such as defence, external affairs, overseas and interstate trade and commerce, currency and banking.

The Commonwealth also has primary responsibility for overall economic management in Australia and acts as the sole income taxing authority and annual general revenue grants are paid by the Commonwealth to the States.

State Government 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.

State taxation powers encompass payroll taxes, stamp duties and land taxes, while they receive, for any purpose, a portion of all the revenue raised by the GST.