Solution for Business Law 3rd Edition Chapter 2, Problem 1

by Nickolas James
128 Solutions 13 Chapters 45849 Studied ISBN: 9780730305743 Business Law 5 (1)

Chapter 2, Problem 1 : 1.How is power shared by the Federal, State...

1.How is power shared by the Federal, State and local governments? If one level of government had to be abolished, which one would you abolish, how and why?


Step-By-Step Solution

See Business Lawpp54-60.

The Australian Constitution sets out the way in which power is shared by the Federal and State governments. The Constitution lists certain powers, called exclusive powers, which can only be exercised by the Federal government. These include laws regulating customs, currency and defence. The Constitution also contains a substantial list of powers, called concurrent powers, which can be exercised by both the Federal and the State governments. These include laws regulating international and interstate trade, corporations, bankruptcy, and intellectual property. In the event of an inconsistency between a valid Federal law and a valid State law, s 109 of the Constitution provides that the Federal law will prevail.

Anything not expressly included in the list of exclusive powers or the list of concurrent powers is deemed to be a residual power and able to only be exercised by the States. The residual powers include laws regulating crime, property, transport, health and education.

Local government – that is, city councils, shire councils, etc – are not really a third level of government. Rather, local governments exercise the powers delegated to them by the State governments; in other words, they are technically part of the State legal system. Local government typically legislates and administers the rules regulating local transport, garbage collection, local advertising and the like.

It is sometimes claimed that three levels of government for a nation with a population of only 22 million is too much government. Yet the abolition of any one of the three levels of government would have drastic consequences. If the Federal government were abolished Australia would return to the pre-Federation position of consisting of a collection of separate legal systems with no overall government to ensure cooperation and consistency. Abolition of the States would result in the Federal government having responsibility for the entire continent, and there are concerns that a national government based in Canberra would have little awareness of or concern about the issues facing, say, people living in Alice Springs or Broome. Similarly abolition of local governments would mean that the State governments have direct responsibility for local issues confronting people in remote locations, and many people outside of capital cities would lack easy and direct contact with government.


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