At different times, however, it means different things.
Sometimes it is synonymous with greater integration of Commonwealth and state functions through complex mechanisms described as “co-operative” in character.
The entanglement of government functions has been driven largely, although not entirely, by money.
On the face of the Constitution, both the Commonwealth and states can impose almost any form of tax, with the exception of taxes on goods, which are prohibited to the states.
It involves crafting a functional, federal democracy for 21st-century Australia, in a world in which multi-level government is the norm.
In the spirit of what sometimes is called subsidiarity it would accept that many decisions must be made nationally – indeed, internationally – but also values the possibility of decision-making at lower levels over which communities have more effective control.Doubts about the constitutionality of this practice have caused further concentration of power in the executive, diminishing accountability through Parliament.Money is not the only driver of integration: the other is an urge to secure uniformity in legislation and its implementation across a wide and increasing range of policy areas.Ironically, the Australian federation is quite well designed for this purpose.The states are large enough for effective government, few enough for effective collaboration and their dispersal across a very large land mass positions them to respond to regional needs in a way that is not practicable for a single set of institutions based in Canberra. One is to restore state tax-raising capacity so as to limit transfers from the Commonwealth and maintain the nexus between responsibility for taxing and spending.Not all government action requires central co-ordination and not all co-ordination requires uniformity.Decisions about whether and to what extent to co-ordinate government action need to be made more openly and justified on the basis of principles that also acknowledge the values of innovation and difference.The potential benefits of federalism are wasted, including innovation, diversity and responsiveness.One of the relatively few checks and balances in the Australian system of government is weakened.Substantial transfers are needed from one to the other.Because the Constitution does not contemplate this degree of fiscal imbalance, it also does not clearly displace the assumption that the government that is responsible for raising money is also accountable for spending it (as occurs in some other federations, of which Germany is an example).