How can we have 3 levels of government if councils are not mentioned in the Australian Constitution?
The Australian Constitution established a federal system of government where both federal and state levels of government are recognised. The Constitution makes no mention of a local level of government.
There was a proposal to change the Constitution to formally recognise local government in 1988, and the question was presented to Australian electors in a referendum. Voters rejected with every state and territory voting ‘No’. Without the necessary majorities, the Constitution was not changed.
However, when an aspect of government is not mentioned in the Australian Constitution it does not necessarily make it unconstitutional. This is the case with local government. Each Australian state has its own constitution and is able to make its own laws. While the states’ powers vary across Australia, each state has a Local Government Act that provides the rules for the creation and operation of councils in that state. In general, these Acts cover how councils are elected and their power to make and enforce local laws, known as by-laws. In this way, we have a third level of government in Australia.
The law-making powers of local government.

Parliamentary Education Office (peo.gov.au)
Description
The law-making powers of local governments include:
- Local roads, footpaths, cycle ways, street signage and lighting
- Rubbish collection and recycling
- Parking
- Parks, sports fields and swimming pools
- Libraries, art galleries and museums
- Childcare and aged care
- Sewerage
- Town planning
- Building approvals and inspections
- Land and coast care programs
- Pet control
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