Australia has 3 levels of government: the Commonwealth (or 'national' or 'federal' level), 6 states, and 3 self-governing territories ('state', 'territory', or 'state and territory' level), and local.
The states (formerly, 'colonies') created the Commonwealth through the Commonwealth Constitution of 1901. The Commonwealth Constitution restricts the Commonwealth Parliament to specific legislative powers.129 So for the Commonwealth Parliament to legislate on a subject, it must find a power in the Commonwealth Constitution to support that legislation.130 The Commonwealth Constitution gives some legislative powers exclusively to the Commonwealth.131 But, for most powers given to the Commonwealth, the Commonwealth shares the power with the states132 (called 'concurrent powers').
Unlike the specific powers that the Commonwealth Constitution gives the Commonwealth, the state Constitutions gives the states general powers ('plenary power'). Thus states can legislate on any subject at all that occurs within their border, with some exceptions. For present purposes, the main exceptions include: the state statute cannot trespass into an area given exclusively to the Commonwealth; and in an area of concurrent power, the state statute cannot conflict with a Commonwealth statute.133
Whereas the states created the Commonwealth, the Commonwealth created the territories. The Commonwealth has exclusive power to legislate for territories.134 The Commonwealth has used this power to give self-government to 3 of those territories—the Northern Territory, Norfolk Island, and the Australian Capital Territory. These self-governing territories can make statutes in similar terms to state parliaments. But because the Commonwealth empowers the territories, the Commonwealth can override the territories' legislation.135
State and territory laws, such as Local Government Acts, control the power of the third (local) level of government. Local governments vary a lot in size and character. Local government bodies include shires, town councils, city councils, and other bodies. These bodies take care of local services such as parks, libraries, local roads, and swimming pools.
129 Bade Harris and David Barker, Essential Constitutional Law (2nd ed, 2004) 17.
130 The federal government has no direct power to legislate on some matters. But the federal government can influence state legislation indirectly through its power to grant financial assistance to the states (Section 96 of the Commonwealth Constitution). Also, the Commonwealth Constitution lets the states refer any of the state's powers to the Commonwealth if the state chooses. In practice, the 2 levels of government cooperate in many areas where the states have formal responsiblilty (such as health, transport, education, and law enforcement): see Department of Foreign Affairs and Trade, Australia's System of Government (www.dfat.gov.au/facts/sys_gov.html) (accessed 2 July 2007). And because of the High Court's expansive interpretation of the Commonwealth Constitution, the legislative power of the Commonwealth Parliament has also expanded.
131 Sections 52 (i), (ii), 90, 51 (vi) and 114, 51 (xii) and 115 of the Commonwealth Constitution.
132 These include most of the topics in section 51 of the Commonwealth Constitution.
133 The state statute will be invalid to the extent of its inconsistency with the Commonwealth statute (section 109 of the Commonwealth Constitution).
134 Section 122 of the Commonwealth Constitution.
135 See further Christopher S Enright and Peter Sidorko, Legal Research Technique (2002) 45.