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Australia has been inhabited for at least 50,000 years, since the remote ancestors of the current Australian Aboriginal people arrived from Southeast Asia. The land was not discovered by Europeans until the 17th century. It was claimed for Britain in 1770, and first colonised in 1788 as a penal colony. Five other colonies, some penal and some free, were founded in the early 19th century.

Van Diemen's Land (i.e. the present day Tasmania) was settled in 1803, and became a separate colony in 1825. The rest of the continent, what is now Western Australia, was formally claimed by the United Kingdom in 1829. Following the spread of British settlement, separate Colonies were created from parts of New South Wales: South Australia in 1836, Victoria in 1851 and Queensland in 1859. The Northern Territory was founded, as part of the Colony of South Australia, in 1863.

Darwin has a tropical climate with distinct wet and dry seasons. The dry season runs from May to September, in the coolest months of June and July daily temperature range is 19 to 30°C. In the Wet season is associated with tropical cyclones and monsoon rains, the majority of rainfall occurs between December and March, thunderstorms are common and humidity is regularly over 70 per cent.

Australia has had a significant school of painting since the early days of European settlement, and Australians with international reputations include Sidney Nolan, Russell Drysdale, and Arthur Boyd—not to mention the prized work of many Aboriginal artists. There are excellent art galleries (even in surprisingly small towns); a rich tradition in ballet, enlivened by the legacy of Dame Margot Fonteyn and Sir Robert Helpmann; a strong national opera company, Opera Australia, made prominent by the world renowned diva Dame Joan Sutherland; and symphony orchestras in all capital cities, in particular the Melbourne and Sydney symphony orchestras. In ths field, conductor Sir Charles Mackerras has achieved international renown.

Since the recession "Australia had to have" (P. Keating) in the early 1990s, the Australian economy has not suffered a recession or "trough" in the business cycle in 13 years. Even the downturn of the early 2000s did not affect its consistent GDP growth. As of October 2004, unemployment had fallen to a level of 5.2%, the lowest level since the late 1970s.

Adelaide hosted the Formula 1 Grand Prix from 1985 on 1995 on a street circuit in the city's eastern parklands. The Formula 1 Grand Prix became a source of pride and losing the Grand Prix to arch-rival Melbourne under questionable circumstances left a void that has since been filled for the most part with the highly successful Clipsal 500 V8 Supercar race event, held on a modified version of the same circuit.

Since 1996, the Coalition government, led by Prime Minister John Howard, has continued to implement microeconomic reform policies. Some have claimed that the deregulation of the labour market during this period has resulted in a needed flexibility in the labour force. Others have criticised these deregulations as having a negative impact on worker's wages, safety and health grounds. Legislation introduced during this period sought to reduce union involvement and power, and has preferred to emphasise enterprise bargaining (a tendency towards wage bargaining). Also during this period, the Coalition government deregulated numerous other industries, including the telecommunications sector, and privatised many of the pre-existing natural monopolies.