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Legislation is law made by parliaments. Legislation is also known as statute law, statutes, or Acts of Parliament. In Australia, legislation is made by the Commonwealth parliament, the State parliaments, and by the legislatures of the Northern Territory, the Australian Capital Territory and Norfolk Island. Other bodies, such as local governments, are given certain powers by parliaments to make legislation as well.

It is a well-established principle inherited from British constitutional law that parliament is sovereign or all powerful. This principle is controversial because, subject to constitutional limitations, it means that in theory parliament can make any law it wants to, even if it is contrary to what most people would regard as their basic rights. The fact that the law-makers must face election is one important brake on this power. However, many now call for the insertion of a constitutionally entrenched ‘Bill of Rights’ to guarantee that parliaments’ law-making powers respect these basic rights. This is yet to happen.

The practical result of the principle of parliamentary sovereignty is that legislation prevails over common law. If there is a conflict between legislation and the common law, legislation will over-ride the common law. However, that conflict must be clear. There is a presumption that rights under common law continue unless the legislation clearly does away with them. "Legislation is written on the common law".

The legislative powers of parliaments are also governed by the Commonwealth and State constitutions. Australia's obligations under various international treaties, conventions and covenants are also beginning to place limits on parliamentary sovereignty, though the present legal position is that these instruments of international law do not generally become part of national law until parliaments enact legislation to do this.

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