Parliament made law is binding on all courts and judges. Courts cannot overrule or challenge an Act unless they hold it to be unconstitutional (that is, beyond the powers given to Parliament by a State or Commonwealth Constitution). Decisions about constitutionality are made by the High Court. The State Parliament has power to make law (Acts or statutes) for all people living within the boundaries of the State. Laws made in one State have no force in another. The Commonwealth Parliament has power to make laws which affect all people living within Australia, but this power is limited to the subject matters listed in the Constitution.

Laws made by the Commonwealth or a State Parliament are called Acts (or statutes or, more generally, legislation). While an Act is in draft form (that is, before it has been voted on and either passed or rejected by the Parliament) it is called a Bill. Parliament may repeal (do away with) or amend (changes) an Act.

In addition to Acts, there are laws covering administrative details and other matters not easily dealt with in an Act. Acts may empower a public authority, a local council, a Minister controlling a government department or a public servant to make Regulations, Rules, ordinances or by-laws. These laws are collectively known as subordinate (or delegated) legislation, because Parliament has delegated its powers to pass these types of laws to another body.