The three levels of law-making is an important aspect of Australian governance, so thank you for the opportunity to explain it Jaiden. The three levels are:
The Australian Parliament makes laws about matters that affect all Australians, such as foreign affairs, defence and Medicare. State/territory parliaments are responsible for matters that affect people who live in that state or territory, such as hospitals, police and roads; and local councils and shires control local matters such as garbage collection and libraries.
However, state/territory and federal parliaments share responsibility for some matters. A good example is education. State/territory governments hire teachers and run schools but the Australian government prepares the national curriculum taught in schools. But what happens when a state/territory law and a federal law conflict? The Australian Constitution states that where state and federal law laws disagree the federal law must be followed. The Australian Parliament can overturn a territory law at any time.
Want more information? Here is a link to our Closer Look investigation of the three levels of law-making.