Hi Danielle, thanks for your question.
On 1 January 1901 the Australian colonies united to become a nation. This is known as federation and resulted in the creation of the Australian Parliament, with the colonies becoming Australia's 6 states. Through federation, the states transferred some of their law-making powers that related to certain areas of law- making to federal parliament. This is the reason that state laws cannot change federal laws.
On some matters the federal Parliament and the state parliaments may make laws about the same things, for example, roads and health. Section 109 the Australian Constitution states that if the federal Parliament and a state parliament pass conflicting laws on the same subject, then the federal law overrides the state law, or the part of the state law that is inconsistent with it.
Chapter 3 of the Australian Constitution outlines the establishment of the High Court of Australia and describes how it can resolve disagreements between the federal and state governments over their law-making powers. If a law is contested—challenged—it is up to the High Court to decide whether the Constitution gives the state or federal parliament the power to make this law.