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Australia (the Commonwealth of Australia) is a constitutional monarchy and Queen Elizabeth II is the queen of Australia. The executive power of the commonwealth is vested in a governor-general (in fact, according to the constitution the role of the queen is purely ceremonial). British intervention in the Australian affairs was formally abolished with the passing of the Australia Act in 1986. In a 1999 referendum, however, voters rejected a plan to replace the British monarch as head of state with a president elected by parliament.

The bicameral Commonwealth Parliament consists of the Senate and the House of Representatives. Each state is represented by twelve senators and each national territory by two. Representatives are allocated to states on the basis of population. Elections take place every three years, although senators have six year terms of office and their seats are contested in alternate elections. Voting is compulsory in Australia. The party that achieves a majority in the House of Representatives forms the government, with its leader taking the role of Prime Minister.

From its early years the federal government has been noted for its liberal legislation, such as women's suffrage (1902), old-age pensions (1909), and maternity allowances (1912). There are three main political parties: liberal, national (these two parties form 'the coalition' ) and Labor. In 1983, Bob Hawke won the first of his three terms as Prime Minister. In 1991, as Australia foundered in a deep recession Hawke lost the Prime Mministership to fellow Laborite Paul Keating who led the Labor to its fifth electoral victory in 1993. In 1996, after 13 years of Labor rule, the Liberal-national coalition led by John Howard won the elections. Howard's coalition was re-elected, although by a smaller margin, in 1998 and continued in power following both the 2001 and 2004 elections.

The last elections took place in November 2007, and the leader of the Labor party, Kevin Rudd was elected as Prime Minister. On December 3rd he became the twenty-sixth Prime Minister of Australia and his first official act as Prime Minister was to ratify the Kyoto protocol.