Australia has three levels of law-making, sometimes referred to as three levels of government.

  • The Federal Parliament legislates - makes laws - for the whole of Australia.
  • The six state and two mainland territory parliaments make laws for each state and territory.
  • More than 560 local councils make local laws for their region or district.

Each level of government has its own responsibilities, although in some cases these responsibilities are shared between multiple levels.

Source: Parliamentary Education Office (PEO), Governing Australia: three levels of law-making, 2018. Available at https://getparliament.peo.gov.au/three-levels-of-law-making

Federal Parliament

The Commonwealth of Australia Constitution Act establishes a Commonwealth (Federal) Parliament, which has two houses: the Senate and the House of Representatives. The 226 members of the Parliament – 150 in the House of Representatives and 76 in the Senate – are responsible for making federal laws. Laws can only be passed or changed with the approval of both houses and the royal assent of the Governor-General. 

The Constitution sets out more than 40 areas where the Federal Parliament has legislative power. These include trade and commerce; postal and telecommunications services; foreign policy; taxation; immigration; defence; census and statistics; quarantine; and currency.

The Federal Government raises money to fund its work on national matters - such as trade, defence, immigration and the environment - by taxing incomes, goods and services, and company profits.

State and territory parliaments

Australia has six state and two territory parliaments. Each state, apart from Queensland, has a parliament comprising two houses: the  Legislative Council and Legislative Assembly (known as the House of Assembly in Tasmania and South Australia).   The parliaments of Queensland, the Northern Territory and the Australian Capital Territory have only one house: the Legislative Assembly.

NSW's Parliament comprises 93 members in the Legislative Assembly and 42 members in the Legislative Council.

State and territory parliaments make the laws that will be enforced within their state or territory. By defining federal powers, the Australian Constitution reserves most other law-making powers for the states. As a rule, if a subject is not listed in sections 51 or 52 of the Constitution, it is an area of state responsibility. Some examples are: schools; hospitals and ambulance services; roads and railways; public transport; utilities; mining and agriculture; forests; police and prisons; and community services.

State and territory governments receive funding from the Federal Government. They also raise money from taxes and fines including, land tax, payroll tax, motor vehicle duties, and driving and vehicle infringements.

In NSW, the various government departments and agencies manage and carry out the NSW Government's responsibilities. A complete list of the services the NSW Government undertakes is available on the Service NSW website.

Local government

There are more than 560 local government bodies - known as councils - across Australia. Councils comprise:

  • elected members (the Mayor and Councillors) who normally serve four-year terms
  • staff members who work for the council.

Local government powers vary state by state and operate with a legislative framework enacted by state parliaments.

Local government responsibilities typically include town planning; considering development and building applications; supervision of building codes; local roads; water, sewerage and drainage; waste and sanitary services; domestic animal registration; and community recreational facilities.

To fund their activities, local councils collect taxes (rates) from all local property owners and receive grants from the federal and relevant state or territory governments.

Local government in NSW

There are 128 local government areas in NSW - 30 councils in the Sydney metropolitan region and 98 non-metropolitan councils. NSW also has the Unincorporated Far West Region in the sparsely inhabited Far West of the state, which is not part of any local government area, and Lord Howe Island, which is also unincorporated but is self-governed by the Lord Howe Island Board.

The Local Government Act 1993 provides the legal framework for local government in NSW.

The Office of Local Government (OLG) is a branch within the NSW Department of Industry, Planning and Environment.  OLG is responsible for advising the Minister  on local government matters and regulating local government across NSW. OLG focuses on policy, legislation, investigative work and programs including local government finance, infrastructure, governance, performance, collaboration and community engagement. OLG collaborates with the local government sector and is the key adviser to the NSW Government on local government matters.

Cooperation across governments

As law and its administration become more complicated, members of the federal, state, territory and local executives must work together to deliver their individual and shared outcomes.

In 1992, the Federal Government established the Council of Australian Governments (COAG). COAG comprises the Prime Minister, state premiers, territory chief ministers and the president of the Australian Local Government Association (ALGA). These members meet twice a year to discuss intergovernmental matters.

COAG is supported by inter-jurisdictional, ministerial-level councils that allow it to focus on key national priorities. These councils provide a forum for intergovernmental collaboration and decision-making; develop policy reforms and other advice for COAG consideration; and oversee the delivery and review of reforms COAG has agreed to. The members of these councils are the ministers who work in the area of responsibility relevant to each council's work, at the Commonwealth, state and territory level.

There are several COAG councils:

Commonwealth, state and territory ministers also meet to discuss and work on areas of shared interest outside the formal COAG council system. These intergovernmental discussions have facilitated the development of uniform national laws to tackle issues such as road transport, food standards and consumer rights.