ABSTRACT
This chapter examines the evolution of the relationship between the State and religion in relation to funding of religion from the early ad hoc funding of the Church of England thorough to the creation of the Australian Charities and Not-for-Profit Commission. The relationship can best be characterized as a tug-of-war between the State and religion. The ad-hoc nature of the funding available for religion is highlighted by the dispute between Rev Richard Johnson and Lieutenant-Governor Grose over the funding of the first church building in the colony. The dispute that followed demonstrated both the power of the State over religion in relation to funding and the ad-hoc nature of funding. One of the most significant changes brought about by the Church Acts was the break in the exclusive relationship between the State and the Church of England. The creation of State funding for religion was simply a function of the colonies' separation from New South Wales.
