As time went by, other areas outside of Sydney and New South Wales were discovered and settled, themselves becoming British colonies. After much debate and discussion in the 1890s, it was decided to bring the six colonies together in a federation. Naturally, this was a hotly debated issue.

In 1899, all colonies, except for Western Australia, agreed upon a Federal Constitution. They were soon joined by Western Australia a year later, and officially, the Commonwealth of Australia was born at the start of 1901. Within this system, each State has its own government, and the federal government has powers which cover areas of interest to all States. Essentially it deals with matters of national significance.

The British sovereign is represented by a Governor-General, who does have certain reserve powers, including the power to dismiss a government. This position is not generally considered to be at the forefront of political events, with the Governor-General acting more as a figurehead than as a key political player.

Exceptions to this rule occurred in 1932 and 1975. In those years, the respective Governor-Generals saw fit to dismiss elected governments. In 1932, Governor Sir Phillip Game dismissed the New South Wales Premier, Jack Lang. In 1975, the then Governor-General, Sir John Kerr, dismissed Prime Minister Gough Whitlam from office, creating an immense public reaction.

More recently, there has been an active movement established in support of Australia becoming a republic, with a popularly elected Head of State.

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