Chapter 9 - Federal Balance of Power

Question 1

How has Australia’s form of federalism changed since federation briefly?

Answer 1

At federation, was coordinate and cooperative, but has shifted towards coercive. Recent trend back towards cooperative after COVID

Question 2

What are some reasons for increasing coercive federalism?

Answer 2

• States losing income tax (S51ii) and customs, duties, excise tax (90)
• Section 96 tied grants: Commonwealth can exploit financial power
• Section 109: allows Commonwealth to cover the field and invalidate conflicting state law
• High Court favours Commonwealth
• Corporations power and 2006 Workchoices case

Question 3

What are some reasons behind the trend of returning cooperative federalism?

Answer 3

• States collecting GST helps financial autonomy and achieves HFE
• Tied grants have become infrequent compared to general purpose grants without conditions
• National Cabinet formed in 2020 to combat COVID and has enhanced collaboration between states and Commonwealth

Question 4

What is an example of a case that eroded state legislative power?

Answer 4

Engineers Case 1920:
- enabled Commonwealth to legislate over a state government-owned factory since it was part of a national union
- Broadened interpretation of industrial relations power (S51xxxv) in Cwealth favour

Question 5

What is an example of a case that expanded commonwealth legislative/financial power?

Answer 5

Uniform Tax Case 1942.
- Commonwealth took over income tax during WW2
- States lost a significant revenue source from S51(ii). Became more reliant on grants, increased VFI

Question 6

What is Section 87?

Answer 6

Section 87 or the Braddon Blot was a 10-year lasting section at federation which required the Commonwealth to pay 75% of S90 revenue to the states, but the Cwealth were given the option to stop paying after 10 years.

Question 7

What is vertical fiscal imbalance (VFI)?

Answer 7

VFI is the term used to describe the disparity between Commonwealth and state government spending and revenue. The states spend more than they earn, while the Commonwealth earn more than they spend.

Question 8

What is HFE?

Answer 8

HFE is a goal of the Commonwealth Grants Commission in distributing GST and grants, which aims to ensure all Australians experience similar standard of living regardless of their state.

Question 9

What is a case that expanded Commonwealth financial power?

Answer 9

Ha & Hammond v NSW 1997.
- State government had levied fees on the sale of tobacco. HC considered them to be excise, which was an exclusive power
- Resulted in state taxation power being reduced and VFI increasing

Question 10

Case that limited Commonwealth legislative power?

Answer 10

Williams case 2. High Court denied the government passing National School Chaplaincy Program

Question 11

What was the Workchoices Case 2006?

Answer 11

Commonwealth took over state industrial relation powers through S51 (xx), or the corporations power which gave them a back door into S51 (xxxv)