The first inhabitants of Australia were the Aboriginal and Torres Strait Islander peoples, who inhabited most areas of the Australian continent nearly 40,000 years ago. Despite some possible trading relationships between northern Aboriginal peoples and New Guinea / Indonesian peoples of Asian descent, the Aboriginal peoples of Australia had very little contact with other peoples for thousands of years.  Australia was not encountered by Europeans until the early 1600s when Dutch explorers charted parts of the eastern coastline. For nearly 200 years European explorers continued to charter the vast coastline of this new territory known as New Holland.

In 1770, an English explorer by the name of Lieutenant (later Captain) James Cook charted the east coast and claimed the land for Great Britain. Due to the overcrowding of the English gaols, Britain decided to use the newly claimed territory as a penal colony. The First Fleet of 11 ships made the long journey to Australia carrying around 2000 people, half of which were convicts. They arrived in Sydney Harbour on 26 January 1788. This foundation day, known as Australia Day, is celebrated throughout the country each year. The men and women of the First Fleet were not well equipped to survive in a new land, and struggled for some time before establishing themselves.  For the next 80 years, thousands of men and women convicts were transported to Australia.

Through the federation of the six states, the Commonwealth of Australia was formed in 1901, bringing the nation together under a single constitution. The constitution and the new government were based on two systems, the Westminster system that is widely used throughout the (British) Commonwealth of Nations and the state and national system that is used in the USA.