In federalism the states are understood to possess a residuary sovereignty that cannot be "invaded" or infringed by the national government. Hence we have a divided sovereignty. Consequently, we have controversies between the states and national government arising over the extent of their respective jurisdictions.
Water is a good example of this in Australia.
This is a nice quote about conservatives and federalism that can equally apply well to Australia:
"These are perilous times for conservative principles. With Republicans controlling all three branches of the federal government, their grip tightened by this month's elections, conservatives will be tempted to forget their scruples about concentrating too much power in one place, as long as their guys are in charge.But someday the other guys will take over. So conservatives had better think hard before they abandon the limits that keep the federal government from assuming power over every aspect of life."
Constitutional federalism derives from the divided sovereignty paradigm which envisions a constitutional division of powers, a division of powers that, perforce, can only be altered by constitutional amendment. The Supreme Court is the institution vested with the responsibility of maintaining this division, a function it should perform by impartially applying the "rules" of the Constitution.