The Australian Constitution gives the states and territories extensive powers, many of which the states and territories have exercised in the response to the COVID-19 pandemic. The major limitation of state ambition in the past – the federal government’s control of most revenue – is less salient in times of crisis. The states and territories may use their newfound moral authority to push for redress of the 'fiscal imbalance' where taxes are raised federally, but spent at the state level.

Part of the moral authority comes from popular support for state handling of the COVID-19 response. Australia Institute polling research finds that state and territory COVID-19 responses have been popular, with majority support for state border closures and the consistent finding that Australians think their state or territory government has handled the COVID-19 pandemic better than the federal government has.

Australia’s COVID-19 response has been highly rated, with few infections and deaths per capita. That said, the vaccine rollout has been criticised for being slow and likely to miss its targets, and state and federal governments have been criticised over their handling of aged care and hotel quarantine.

COVID-19 has already provoked one major change in federal–state relations, with the Council of Australian Governments (COAG) replaced by the National Cabinet. However, with concerns around transparency, accountability and representation, states may wish to pursue reform of the National Cabinet once the imminent threat of COVID-19 has passed.

The evidence points to a revival of the fortunes of the states and territories in the Australian federation that will continue long after the COVID-19 crisis abates.