Federalism and the Constitution Essay Example

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Federalism and the Constitution

Federalism and the Constitution


Since the establishment of the federation more than 100 years ago, federalism, especially in the Australian has undergone numerous changes. currently all the level of government, federal, state and local have more roles to play in terms of authoritative allocation of resources and provision of different services to the citizens. The main objective of this paper is to assess the changes in federalism over the past century and critically examine the changes, their necessity and their application given the limited changes in the constitutions.

Federalism and the factors driving changes within the system

Federalism is defined as a political system in which power is shared and divided among the central government, state and local government (Palermo & Alber 2015, p. 15). The main objective of these arrangements is to limit the power of the government and ensure that resources and the implementation of the constitution are conducted in an equal and just manner (Hodgins, et al 2010, p. 22). Over the years, the powers of the federal or national government has increased at the expense of that of the local and state governments. One of the main contributors to an increase in such powers is the High Court, which has, over the years defined the relationship and the powers of the federal government through an elaborate interpretation of commerce and supremacy clauses in the constitution (Hueglin et al 2015, p. 271).

Upon the inception of the Australian constitution in 1901, there were disputes between the federal and the state governments concerning revenue powers (Kildea et al 2012, p. 290). In 1908, two legislations were passed signaling the intentions of the federal government divert the Commonwealth budget surplus into trust fund (Hodgins, et al 2010, p. 25). These funds were to finance old age pensions and ensure high-level defense in the coastal region. These legislations ensured that there were no surplus funds that were to be shared among states (Kildea et al 2012, p. 290). when these legislations were challenges, the Australian High Court ruled in favor of the federal government arguing that money as appropriated was for constitutional expenditures and did not constitute surplus despite the fact that it had not been spent (Palermo & Alber 2015, p. 16). Constitutionally, there is no prohibition on the authority of states to levy taxes. Since 1915, the states levied taxes on incomes simultaneously with the federal government (Skogstad et al 2013, p. 207). However, the High court in the second income tax case of 1957 argued that liability of income tax as presented by the Commonwealth had precedence of that imposed by the states and this made the commonwealth more powerful in terms of determining the percentage of tax that could be levied on the income of the citizens (Brown and Bellamy 2007, p. 13).

Federalism has also experienced changes in terms of the separation of powers and the differences in terms of the responsibilities of the commonwealth and the state governments. Immediately after the First World War, the High Court argued that the constitutional assignment of powers was workable (Palermo & Alber 2015, p. 17). This was in line with the original conception of federalism, which argued that there was need to differentiate power between the federal and the state government. However, in its landmark ruling in the Engineers case of 1920, the court rejected two fundamental ruling that differentiated the powers of the commonwealth and that of the state governments (Ward & Ward 2009, p. 491). The doctrine of reserved powers to the states and the doctrine of implied immunities and instrumentalities, which claimed that the two levels of government were immune from the laws of each other, were rejected. The rejection of these rulings meant that federalism was to be hierarchical and that state governments did not enjoy the same status of sovereignty as the commonwealth (Loughlin et al 2013, p. 396).

Disunity among states was also cited as a major contributor to the ascendency of fiscal centralization and the changes in federalism in Australia. Mutual distrust never ended even after the establishment of the federation (Ward & Ward 2009, p. 493). The less popular states were in opposition of the larger states and in most cases, they supported the commonwealth government in political power plays. The perceived differences were founded on economic disparities. The introduction of fiscal equalization grants, which began in 1933, was a change in federalism, which gave additional power to the Commonwealth over the states (Skogstad et al 2013, p. 209).


The evolution of federalism gas been subjected to numerous changes to ensure that power is controlled and centralized by the Commonwealth. The changes in the view of the Australian high court were to ensure that political differences among states were controlled by the commonwealth for the good of the citizens. This explains why the percentage of taxes levied on incomes was a prerogative of commonwealth while the states were made subject of the commonwealth to limit their powers and enhance uniform growth in the country.


Brown, A and Bellamy, A. J. 2007.Federalism and regionalism in Australia new approaches,

new institutions? The Australian National University, A.C.T.: ANU E Press, pp. 11-13. http://epress.anu.edu.au/?p=52401.

Hodgins, Bruce W., Don Wright, and W. H. Heick. 2010. Federalism in Canada and Australia:

the early years. Waterloo, Ont: Wilfrid Laurier University Press, pp. 22-25

Hueglin, Thomas O., and Alan Fenna. 2015. Comparative federalism: a systematic inquiry.

Toronto: Toronto University Press, p. 271

Kildea, Paul, Andrew Lynch, and George Williams. 2012. Tomorrow’s federation: reforming

Australian government. Annandale, N.S.W.: Federation Press

Loughlin, John., Kincaid, John & Swenden, Wilfred. 2013. Routledge Handbook of Regionalism

and Federalism. Routledge: London

Palermo, Francesco, and Elisabeth Alber. 2015. Federalism as decision-making: changes in

structures, procedures and policies. Leiden: Brill Nijhoff, p. 15

Skogstad, Grace Darlene, David Cameron, Martin Papillon, Keith G. Banting, and Richard

Simeon. 2013. The global promise of federalism.  Institute of Intergovernmental Relations, Queen’s University ; Toronto : University of Toronto Press, pp. 207-208

Ward, Ann, and Lee Ward. 2009. The Ashgate research companion to federalism. Farnham,

Surrey, England: Ashgate, pp. 391- 393. http://site.ebrary.com/id/10325923.