Doing business in Australia: Part 2 – Government and court structures

Emily Shoemark

30 Jul 2019


  • Business Law
  • Meritas

Australian members of Meritas, the premiere global alliance of independent law firms, have joined together to publish Australia: A legal guide for business investment and expansion. The guide provides practical information for foreign investors and businesses wanting to operate in Australia. In this series of articles we’ll present a different topic from the guide each week (You can read Part 1 – Top 10 questions here). In Part 2 we look at levels of government in Australia and our legal system. 

Levels of government

The Australian Constitution apportions responsibilities between the Commonwealth government and the states and territories.
Australia’s system of government is similar in many respects to other federal systems, such as the United States of America
and Canada.

The Commonwealth, state and territory governments each make laws in their respective areas of responsibility. Federal matters include most areas of taxation, marriage, divorce, foreign policy, defence, trade and commerce, currency, fisheries, trade mark, patent and copyright registration, banking and monetary system and immigration. The states and territories regulate matters such as health, education, police, major road construction, public transport, agriculture, police, prison, community services and utilities within their borders.

In addition to federal and state or territory laws, some 560 local or municipal governments make various regulations and
bylaws affecting businesses operating within their jurisdictions. They also deliver a range of services to communities, including
environmental, town planning, building approvals, cultural and recreation and local infrastructure facilities. Accordingly, businesses in Australia must be aware of and comply with federal, state and territory laws in which the business operates and the bylaws of each city, town or shire where the business is located or trades.

Australia adheres to the principles of responsible government.

Some states have been known to cede certain powers to the Commonwealth.

Court and legal system

The Australian legal system is modelled on the English common law system of judge-made (or case) law and written (statutory)
law made by the various parliaments.

The federal and state courts have separate and shared jurisdictions. The Federal Court generally has jurisdiction over matters arising under Commonwealth legislation, which includes bankruptcy, aspects of consumer and competition law, federal taxation and intellectual property.

Both federal and state courts have jurisdiction over corporations, including insolvency matters.

The state courts generally have jurisdiction over matters arising under state legislation and common law, including commercial law, contract, equity, torts and criminal law, and state taxation.

The typical hierarchy of state courts is:

  • High Court of Australia
  • Court of Appeal
  • Supreme Court
  • District Court or County Court
  • Magistrates’ or Local Court (dealing with small disputes and minor offences).

The federal system has a similar hierarchy:

  • High Court
  • Full Federal Court
  • Federal Court
  • Federal Circuit Court.

Extensive cross-vesting arrangements mean that the Federal Court can hear a matter involving a mixture of state and federal matters. Similarly, a state court can usually determine a matter that involves federal issues.

How can we help?

You can find out more about our involvement with Meritas here, and for assistance with any business legal needs please contact our Business Law team on 02 6285 8000 or by email.

You can read Doing business in Australia Part 1: Top 10 questions here.