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Through Australia, Parliamentary system and Federation

The country has maintained a stable liberal democratic political system under its Constitution, the world's tenth oldest, since Federation in 1901. Australia largely operates as a two-party system in which voting is compulsory. The Economist Intelligence Unit rated Australia a "full democracy" in 2023.

Like other Westminster-style systems of government, Australia's federal system of government consists of three branches: the legislative (Parliament), the executive (the prime minister, the cabinet, other ministers, and government departments), and the judicature (the High Court of Australia and other federal courts). The Australian government consists of the party or coalition that had majority support in the lower house and exercises both executive (as ministers) and legislative (through control of the House) power.

The federal Parliament (as defined in section 1 of the Constitution) comprises the monarch and is bicameral (has two chambers): the House of Representatives (lower house) and Senate (upper house). The House of Representatives has 150 members, each representing an individual electoral district of about 165,000 people. The Senate has 76 members: twelve from each of the six states and two each from Australia's internal territories, the Australian Capital Territory and Northern Territory.

Separation of powers is the principle the power of state should be shared between multiple bodies, in order to avoid the concentration of power in one entity. The legislature proposes and debates laws that the executive then administers, and the judicial arbitrates cases arising from the administration of laws and common law. However, in accordance with Westminster system, there is no strict separation between the executive and legislative branches, with ministers required to also be members of the legislature. Only a court can deem if a law is constitutional or not.

The Australian system of government combines elements derived from the political systems of the United Kingdom (fused executive, constitutional monarchy) and the United States (federalism, written constitution, strong bicameralism), along with distinctive local features, and has therefore been characterised as a "Washminster mutation".

Federal nature

Australia is a federation, with different powers and responsibilities for the three levels of government: the federal government, the states and territories and local government.

The federal nature and the structure of the Parliament of Australia were the subject of protracted negotiations among the colonies during the drafting of the Constitution. The House of Representatives is elected on a basis that reflects the differing populations of the states. Therefore, the most populous state, New South Wales, has 48 members, while the least populated, Tasmania, has only five. This is in contrast to the Senate which is elected on a basis of equality among the states: all states elect 12 senators, regardless of population. This was intended to ensure that smaller states retained influence over legislation and that laws could not be passed with only the support of the more populous states. The Australian Capital Territory and the Northern Territory, the only territories represented in Senate, each elect only two.

The federal government may only legislate on certain matters, with any remaining areas falling within the responsibility of the states. For example, the federal government is responsible for defence, inter-state trade and bankruptcy while the states are responsible for hospitals and schools. Additionally, the states can agree to refer any of their powers to the Commonwealth government via legislation, as has been done to allow the Commonwealth to regulate corporations. The federal government can also significantly influence state legislation by making tied grants (money which comes with certain conditions). This is a significant power due to high levels of vertical fiscal imbalance arising because of the limited revenue raising capabilities of the states.

In addition, Australia has several territories, two of which are self-governing: the Australian Capital Territory and the Northern Territory. As these territories' legislatures exercise powers devolved to them by the Commonwealth, the Parliament of Australia has the authority to override their legislation and to alter their powers. Australian citizens in these territories are represented by members of both houses of the Parliament of Australia, albeit with less representation in the Senate. Norfolk Island was self-governing from 1979 until 2015, although it was never represented as such in the Parliament of Australia. The other inhabited territories: Jervis Bay, Christmas Island and the Cocos (Keeling) Islands, have never been self-governing.

The third level of governance is local government, in the form of shires, towns or cities. The councils of these areas are composed of elected representatives (known as either councillor or alderman, depending on the state). Their powers are devolved to them by the state or territory in which they are located.

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