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On 1 January 1901, federation of the Colonies was completed after a 10 year gestation period, and the Commonwealth of Australia was born, as a dominion of the British Empire. The Australian Capital Territory was separated from New South Wales in 1911, to provide a neutral place for the proposed new federal capital of Canberra (the initial capital having been Melbourne). Although Australia had become independent, the British government retained some powers over Australia until the Statute of Westminster in 1931, and the theoretical authority of the British Parliament over individual states was not completely severed until the passing of the Australia Act in 1986. The original constitution gave the federal government power to make laws relating to any race of people except Aborigines. In 1967, a referendum supported by more than ninety per cent of voters gave the federal government the right to enact laws to protect Aboriginal people and to count them in the census.

Despite perhaps poetry seeming out of the typical Australian character it played an important part in the founding of Australian literature. Two poets who vie for the position of greatest Australian poet are Christopher Brennan and Adam Lindsay Gordon. Gordon was not born in Australia but the Azores. Despite this he is often called the "national poet of Australia" and is the only Australian with a monument in Poets' Corner of Westminster Abbey in England.

Australia is home to the Great Artesian Basin - an important source of water for people and cattle in the parched outback. This basin is the world's largest and deepest fresh water basin.

Australia is situated in the middle of the tectonic plate, and therefore has no volcanism, although it may sometimes receive minor earthquakes. The terrain is mostly heavily weathered, low plateau with deserts, rangelands and a fertile plain in southeast. Tasmania and the Australian Alps contain a number of permanent icefields and numerous glaciers.

In common with many other developed countries, Australia is currently experiencing a demographic shift towards an older population, with more people retiring and fewer people of working age. Similarly, a large number of Australian citizens (950,000 as of 2004) live outside of their home country. This number (almost 5%) represents a higher per capita percentage of overseas residents than many other countries including the United States. This phenomenon was, until recently, given little attention by the Australian government and media, but the term Australian Diaspora has now joined the Australian vocabulary.