Federalism Creates Both Advantages And Disadvantages For Business. Discuss Providing Examples To Illustrate Your Answer.

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Federalism creates both advantages and disadvantages for business. Discuss providing examples to illustrate your answer. There are an increasing number of nations that are adopting federalism in order to enjoy the benefits. Countries such as India, Brazil and Belgium have adopted federalism regarding it as a modern and flexible system of government. Australia has been one for over a hundred years now. Australia’s adopted a Federal Constitution on 1 January, 1901 which distributed legislative power over public policies between the Commonwealth and the State governments (Grewal and Sheehan, 2003). Eccleston et al. (2009, pp.34-35) finds that prior to becoming a federation, the six colonies in Australia had considerable political and economic independence which they did not want to relinquish. This essay will explain the federal structure of government and discuss why countries choose to adopt federalism in the first place. The advantages and disadvantages of this form of government for businesses will then be discussed to form a conclusion on the best form of government for Australia. A federal system can be described as one in which there is a central or national government, with sovereign state or regional governments and a division of powers between national and state governments [AUS POLITICS.COM]. Each level of government has its own source of power and its portion of responsibility. Because of the two-tiered nature of the federal government, both forms of government, state and federal, are able to act as a check on the other. This limits the capacity of each level thereby ensuring that neither level of government can abolish the other (Eccleston et al., 2009, pp.34-35). Countries have adopted federalism for three main reasons – historical, cultural differences and scale. United States of America is perhaps the most well known for historical

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