The Commonwealth government was created with a Constitution patterned partly on the U.S. Constitution. The powers of the Commonwealth are specifically defined in the Constitution, and the residual powers remain with the states.

Australia is an independent nation within the Commonwealth. Queen Elizabeth II is the sovereign and since 1973 has been officially styled "Queen of Australia." The Queen is described throughout Australia by a governor general and in each state by a governor.

The federal Parliament is two-chambered, consisting of a 76-member Senate and a 150-member House of Representatives. 12 senators from each state are elected for 6-year terms, with half elected every 3 years. Each territory has two senators who are elected for 3-year terms. The members of the House of Representatives are allocated among the states and territories roughly in proportion to population. In ordinary legislation, the two chambers have coordinate powers, but all proposals for appropriating revenue or imposing taxes must be introduced in the House of Representatives. Under the prevailing Westminster parliamentary system, the leader of the political party or coalition of parties that wins a majority of the seats in the House of Representatives is named prime minister. The prime minister and the cabinet wield actual power and are responsible to the Parliament, of which they must be elected members. General elections are held at least once every 3 years; the last general election was in November 2001 and next will be in 2004.