Changing Balance of Power in Commonwealth and State powers of Australia Year 12 P&L

Original intentions State power were to far outweigh Commonwealth powers. This is why Federation took so long and Exclusive powers were given to commonwealth. I.e. the rest for states to conduct.

Types of Federal Models Centralist - Commonwealth dominate Co operative- powers equal between the two Coordinating- stronger state powers and federal limited to coordinating role. We have moved from a Cooperative towards a Centralist model. Why?

Reasons for Change in Balance Changes in society-i.e. well developed commercial, industrial, transport and communication strictures have shrunken the distances. Issues like Industrial relations and the environment and nation wide concerns.

High Court Decisions Engineers case and Uniform Tax Case expanded power. High court decisions. I.e. Koowarta and Tasmanian dams case expanded Commonwealth power through external powers. S51(xxix)

Referendums Most votes allocating more power to Commonwealth have been turned down(1 out of 25). Ones of note-State debts, Social Services and aboriginals.

Financial Relations Commonwealth has increased financial powers in many ways allowing them more influence over states. Customs and Excise powers-Commonwealth took over powers after Federation. Goods brought into country and other goods like alcohol,tobacco and petrol. Huge $$$$$’s Loans Council but has diminished in recent years.

Financial Relations Income Tax gained during World war II, led to vertical fiscal imbalance. (80% of taxes but only 50% of expenditure). Commonwealth grants-comprise half of states revenue. Therefore huge financial pressure can be put on states .I.e. Nelson and education. Tied grants have increased in recent times.

Unchallenged Legislation and Referral of Powers Many concurrent powers between two levels, s109 states that Commonwealth overrides. Introduction of Commonwealth Employment services (Centre Link). Referral of powers- University funding (1974) to Comm. Unchallenged Legislation- Australia Act (1986) ended State and Federal appeals to Privy council.

State Powers Still play a very effective and powerful role. Can protect themselves: Policy jurisdiction, finances, state loyalties and distrust of Commonwealth government by electorate. Policy Jurisdiction- most important government policy areas are included in residual powers of the states. I.e./ education, health, law and justice and environment. Day to day life of citizens are impacted by states more.

State powers Finances- commonwealth must give them money. High court decisions- trend towards centralism, however, some important cases have protected states.ie/ James Case(1936) meant Commonwealth could not restrict trade and States Banking Case(1947) rejected comm. Forcing states to bank with commonwealth. (Bankwest and Commonwealth) Major parties especially Liberals are state based, and distrust Canberra.