The decision to centralise, or to decentralise, the responsibility for law-making in relation to a subject of shared legislative competence is a fundamental dilemma for the polities of a federation. The advantages and disadvantages of both are well known. Amongst other things, centralisation promotes national unity, it decreases regulatory “arbitrage”, it may reduce search and compliance costs, and it capitalises on economies of scale in administration and law-making. By contrast, decentralisation is more receptive to local conditions, and offers the advantages that derive from interjurisdictional competition.
Australian corporate law has seen its share of the debate. That debate has been undeniably directional-there has been, over the past forty years, considerable momentum towards centralisation. Each legislative step taken in that period has been one closer to centralised national laws and administration. The only real opposition came to the Commonwealth's attempt to arrogate legislative power to itself in the Corporations Act 1989 (Cth), which the High Court struck down as unconstitutional.