"Why doesn't the federal government control all funding?"

Thank you for your question, Meg. The short answer is that since 1901 Australia has been a federation of states, with different levels of government having responsibility for various areas of funding and expenditure. This federal arrangement is determined by the Australian Constitution.

Section 51 of the Constitution lists the areas in which the Australian Parliament can make laws. These national areas of responsibility include funding invalid and old-age pensions and, since a 1946 change to the Constitution, maternity allowances, child endowment and unemployment benefits. To pay for this expenditure, the Constitution also gives the Australian Parliament the power to impose taxes, set bounties on the production or export of goods, and to borrow money on the public credit.

Sometimes both the Australian Parliament and the states have the power to make laws about the same issue. However, Section 109 of the Constitution determines that a federal law may override a state law if there is a conflict between the two. Also, using Section 122 of the Constitution, the Australian Parliament may override a territory law at any time.

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