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The land that is now Australia was first discovered by Europeans in 1522 by the Portuguese explorer Cristóvão de Mendonça, but it was only in the 17th century that the island continent became the subject of European exploration, with several expeditions sighting Terra Australis: The Dutch explorer Willem Jansz (1606), the Portuguese explorer Luis Vaez de Torres in Spanish service (1607), and the Dutch explorers Jan Carstensz (1623), Dirk Hartog and Abel Tasman (1642), after whom is named the island of Tasmania, but which he himself originally named after Anthoonij van Diemenslandt.

The British Crown Colony of New South Wales began by the establishment of a settlement (later to become Sydney) in Port Jackson by Captain Arthur Phillip on January 26, 1788. The date of arrival of the First Fleet was later to become the date of Australia's national day, Australia Day.

The sharing of animal and plant species between adjacent parts of Australia, Papua New Guinea, and Papua and nearby Indonesian islands point to early land bridges closed when sea levels rose. The historically traditional movement of people between these places in primitive sailing craft for trade and fishing, point to the possibility of Arab and Chinese traders to the northern islands learning of and then visiting the shores of the southern continent from as early as the 9th century. Maps compiled in Europe from the late 1400s show parts of the coastline.

Sydney boasts a full roster of musical, theatrical and artistic activity throughout the year, from the formal - including the Sydney Symphony Orchestra, the Sydney Theatre Company, the Sydney Dance Company, and the Archibald Prize - to festivals, including the Sydney Festival, a celebration of free performances throughout January. Many internationally known Australian rock bands have had their conception in Sydney, from Midnight Oil to INXS.

Melbourne is home to nine of the sixteen teams in the Australian Football League, whose five Melbourne games per week attract an average 35,000 people per game. Melbourne hosts the Australian Open tennis, one of the four Grand Slam tournaments; the Melbourne Cup - the most prestigious handicap horse race in the world; the hugely popular 'Boxing Day' cricket test match held each year from 26-30 December at the Melbourne Cricket Ground (a massive arena that can hold up to 100,000 spectators); the Australian Grand Prix Formula One championship.

As one would expect from a city its size, Melbourne contains all manner of pubs, bars, and nightclubs. The CBD contains a wide variety of venues, from the ubiquitous faux-Irish pubs proliferating around the world, to some very upmarket establishments (such as the Supper Club, which offers all manner of exclusive wines at exclusive prices), serious jazz venues on Bennetts Lane, fashionable nightclubs and dance venues, and massive pickup joints (of which The Metro on Bourke Street is perhaps the biggest).

Today, many tribal Aborigines lead a settled traditional life in remote areas of northern, central, and western Australia. In the south, where most Aborigines are of mixed descent, most live in the cities.

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.