As we have seen in earlier chapters, the Australian Constitution sets up a federal republican system of government in which the people are sovereign. All of the institutions of the Commonwealth Government – the parliament, the executive, including its monarchic trappings, and the High Court – are constituted with the particular powers and functions specified in or implied by the Constitution.

The Commonwealth itself is only one part of the larger constitutional system that includes the States and Territories. In this system the people rule not through a representative legislature, as might be the case in a unitary system of majoritarian democracy, but through the Constitution, which sets up and controls all the institutions of government, including, at the national level, the bicameral parliament with specified, and hence limited, powers. In sum, Australia has a constitutional rather than a majoritarian democracy, so that it is not appropriate to apply criteria or assumptions about the latter to the former.

Federalism entails the basic division of political institutions and powers between two levels of government, national and State, in such a way that each is independent of the other in certain fundamental ways. In a federal republic like the Australian, the institutional framework of federalism, including the division of powers between governments, is specified in the written Constitution authorised by the sovereign people. In other words, governments have specified and limited powers, whereas the people are sovereign.