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The territories of Australia are established by the Commonwealth government, and are therefore subject to Commonwealth laws. The Commonwealth may deign to give them powers to establish laws in some areas, but essentially this is at the discretion of the Commonwealth government. The territories are really just extensions of the Commonwealth government and its laws.

When the six colonies federated as states, their powers were defined by the Constitution. The territories were established a decade after federation, and although there is provision for them to become states at a later time, until that happens they are still subject only to Commonwealth law.

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Q: Why do the two Australian territories have reduced levels of government?
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