In Australia the federal and state/territory governments share provision and regulation in education. Federal/state roles have accumulated ad hoc, there are no binding agreements on a lasting basis, and there is a lack of synchrony between the legal, policy, administrative and funding frameworks. The states are strongest in the legal dimension and weakest in funding power. Arrangements also vary significantly between the different sectors. Federal/state relations have contributed to an unhelpful politicisation of policy and a national failure to tackle key lacunae in provision, for example in early learning, and training. However, following the High Court’s decision in the November 2006 Work Relations case, which strengthened the legal position of the federal government, federal/state relations in education are expected to change markedly. The paper analyses the implications for higher education where the federal government has already signalled its desire for an expanded federal legal regime.