One of the most significant features of Australia's political system is that the Constitution establishes two tiers of government, or what we call a federal political system. This means that Australians are ruled by the Federal Government in Canberra as well as by their respective State or Territory Government (in addition to local government). Given the profound implications of Australian federalism, this chapter describes the origins and key features of Australia's federal system, while the second half of the chapter provides some more detailed analysis of how Australia's federal system impacts upon political decision making.