Sport in Australia is strongly supported by all levels of government. In 2000-01, total government funding for sport and recreation activities was $2,124.2 million (AUD). Of this, the Commonwealth Government contributed $19.89 million (9%), state and territory governments contributed $875.2 million (41%) and local governments provided $1,050.1 million (49%). The Australian Sports Commission (ASC) is the federal government body responsible for distributing funds and providing strategic guidance for sporting activity in Australia and operates the Australian Institute of Sport. Each state and territory in Australia also have agencies responsible for sport and recreation policy. Each state and territory also operation their own institutes and academies of sport.

Throughout the country a wide variety of sports are played. According to official government statistics, in 2005–06, the most popular sports in terms of crowd attendance were Australian rules football, horse racing, rugby league, motorsport, cricket, rugby union and soccer (association football) in descending order. Research by a marketing company found that those attracting the "most interest" among adults in capital cities during 2006-07 were cricket, swimming, tennis, Australian rules football, soccer, rugby league, rugby union and motor sport. According to official statistics, the most popular forms of "physical recreation activity" among Australians aged 15 years and over, in 2005-06 were walking, aerobics/fitness, swimming, golf, tennis, soccer and Australian rules football. According to some sources, the cultural significance and long history of cricket in Australia means that it is a de facto "national sport". Armchair sports fans drive high television ratings for sports programmes. In fact, nine of the top 10 highest rated shows in 2005 were sports programmes. The most watched sport on Australian television is rugby league with an aggregate audience of 128.5 million viewers in 2009.

Such is the Australian population’s devotion towards sport that it is sometimes humorously described as "Australia’s national religion". Popular comedic identities such as The Twelfth Man and Roy and HG send up Australia’s love of sport through the use of parody.

Professional sport leagues in Australia use a model based on franchises and closed league membership, as is standard in North America. The "European" system of professional sports league organization, characterized by promotion and relegation, is foreign at professional level though used widely in amateur competitions.

In October 2007, the Australian Government has announced a new drug policy for sport that it hopes will be adopted by all sporting bodies and will involve tests of 6000 illicit drugs a year.

Approximately 24% Australians over the age of 15 regularly participate in organised sporting activities in Australia. Australia has strong international teams in cricket, soccer / football, field hockey, netball, rugby league, rugby union, and performs well in cycling, rowing, and swimming. Some of Australia’s most successful sportspersons are swimmers Dawn Fraser, Murray Rose, and Ian Thorpe, sprinter Betty Cuthbert, tennis players Rod Laver and Margaret Court, and cricketer Donald Bradman. Nationally, other popular sports include Australian rules football, horse racing, surfing, football (soccer), and motor racing. Australia has participated in every summer Olympic Games of the modern era, and every Commonwealth Games. Australia hosted the 1956 Summer Olympics in Melbourne and the 2000 Summer Olympics in Sydney, and has ranked among the top six medal-takers since 2000. Australia has also hosted the 1938, 1962, 1982, and 2006 Commonwealth Games. Other major international events held in Australia include the Grand Slam Australian Open tennis tournament, international cricket matches, and the Formula One Australian Grand Prix. The highest-rating television programs include sports coverage such as the summer Olympic Games, State of Origin, and the grand finals of the National Rugby League and Australian Football League.

Two Olympic Games have been held in Australia; the 1956 Summer Olympics in Melbourne and the 2000 Summer Olympics in Sydney. Australia is one of only three countries to have sent athletes to every Summer Olympic Games. Australia is also currently the only southern hemisphere country to have won a gold Olympic medal in the Winter Olympics. The most successful Australian athlete at an Olympics in terms of medals won is Ian Thorpe with nine medals, with five of them gold. Athletes who have achieved four gold medals were: Betty Cuthbert, Murray Rose, Dawn Fraser and Shane Gould.

The most medals Australia has won at an Olympics was at Sydney 2000, with 58 medals, with 16 of them gold. It was also the largest team Australia has had at an Olympics with 630 athletes, helped by the home country’s automatic qualification into every sport. The most gold medals Australia has won at an olympics were at Athens 2004, with 17.

A folk club movement developed in Australia under the influence of those in Great Britain. A number of British singers have spent periods in Australia and have included Australian material in their repertoires, e.g. A. L. Lloyd, Martin Wyndham-Read and Eric Bogle.

Indigenous Australian music refers to the music of Aborigines and Torres Strait Islanders. Music forms an integral part of the social, cultural and ceremonial observances of these peoples, and has been so for over 60,000 years. Traditional Indigenous music is best characterised by the didgeridoo, the best-known instrument, which is considered by some to be the world’s oldest. Archaeological studies of rock art in the Northern Territory suggest people of the Kakadu region were playing the instrument 15,000 years ago.

The earliest western musical influences in Australia can be traced back to two distinct sources: the first free settlers who brought with them the European classical music tradition; and the large body of convicts and sailors they brought with them, who brought the traditional folk music of England, Wales, Scotland and Ireland. The practicalities of building a colony means that there is very little music surviving from this early period, although there are samples of music originating from Hobart and Sydney that date back to the early 1800s.

The history of jazz and related genres in Australia extends back into the 19th century. During the gold rush locally formed ‘blackface’ (white actor-musicians in blackface) minstrel troupes began to tour Australia, touring not only the capital cities but also many of the booming regional towns like Ballarat and Bendigo.

Australia has a long tradition of country music, which has developed a style quite distinct from its U.S. counterpart. Early roots of Australian Country are related to folk traditions of Ireland, England, Scotland and many diverse nations. "Botany Bay" from the late 1800s is one example. Waltzing Matilda, often regarded by foreigners as Australia’s unofficial National anthem, is a quintessential Australian country song, influenced more by Celtic folk ballads than by American Country and Western music. This strain of Australian country music, with lyrics focusing on strictly Australian subjects, is generally known as "bush music" or "bush band music." The most successful Australian bush band is Melbourne’s Bushwackers, active since the early 1970s.

In the mid-1950s, American rock and roll spread across the world. Sydney’s independent record label Festival Records was the first to get on the bandwagon in Australia, releasing Bill Haley & His Comets’ "Rock Around the Clock" in 1956. It became the biggest-selling Australian single ever.

The "second wave" of Australian rock is said to have begun in about 1964, after the impact of The Beatles. Beat groups like Billy Thorpe & the Aztecs and Ray Brown & The Whispers were followed by The Easybeats, the Bee Gees, The Masters Apprentices, The Loved Ones and cult acts like The Throb. A wave of acts also came from New Zealand, including Ray Columbus & the Invaders, Max Merritt & The Meteors, Dinah Lee, Larry’s Rebels and The La De Das.

The "third wave" of Australian rock began in about 1970 with the last of the early 60s groups dissolving. Few acts from this era attained major international success, and it was even difficult to achieve continued fame across Australia, due to low radio airplay and the increasing dominance of overseas performers on the charts.

Recently, bands such as Cut Copy, The Presets, The Potbelleez, Polo Club, Empire of the Sun and Pnau have made a name for themselves in the genre. The success of The Presets at the 2008 ARIA Awards and the Potbelleez in the mainstream media was indicative of the rapidly growing popularity of electro house in Australia. Cut Copy frontman Dan Whitford has attributed the band’s success to a change in public attitude as much as the band’s quality, explaining "It’s a case partly of timing and a growing awareness of electronic music in Australia". Pnau’s first album, Sambanova, was released in 1999, at a time when many in Australia considered electronic music to be a dying breed. Nonetheless, the band traveled around the US and Europe, and slowly made a name for themselves, and for a rebirth of electronic music in the country.

Australian visual arts are thought to have begun with the cave and bark paintings of its Indigenous peoples. The traditions of Indigenous Australians are largely transmitted orally and are tied to ceremony and the telling of the stories of the Dreamtime. From the time of European settlement, a theme in Australian art has been the Australian landscape, seen for example in the works of Albert Namatjira, Arthur Streeton and others associated with the Heidelberg School, and Arthur Boyd. The country’s landscape remains sources of inspiration for Australian modernist artists; it has been depicted in acclaimed works by artists such as Sidney Nolan, Grace Cossington Smith, Fred Williams, Sydney Long, and Clifton Pugh. Australian artists influenced by the modern American and European art include cubist Grace Crowley, surrealist James Gleeson, abstract expressionist Brett Whiteley, and pop artist Martin Sharp. The National Gallery of Australia and the various state galleries maintain Australian and overseas collections, from early in the 20th century until the present.

Many of Australia’s performing arts companies receive funding through the federal government’s Australia Council. There is a symphony orchestra in each of the states’ capital cities, and a national opera company, Opera Australia, which became prominent through the singer Joan Sutherland. Nellie Melba was her famous predecessor. Ballet and dance are represented by The Australian Ballet and various state dance companies. Each state has a publicly funded theatre company.

The Australian cinema industry began with the 1906 release of the The Story of the Kelly Gang, which is regarded as being the world’s first feature-length film, but both Australian feature film production and the distribution of British-made features declined dramatically after World War I as American studios and distributors monopolised the industry and by the 1930s around 95% of the feature films screened in Australia were produced in Hollywood. By the late 1950s feature film production in Australia had effectively ceased and there were no all-Australian feature films made in the decade between 1959 and 1969. Thanks to initiatives by the Gorton and Whitlam federal governments, the New Wave of Australian cinema of the 1970s brought provocative and successful films, some exploring the nation’s colonial past, such as Picnic at Hanging Rock and Breaker Morant, while the so-called "Ocker" genre produced several highly successful urban-based comedy features including The Adventures of Barry MacKenzie and Alvin Purple. Later hits included Mad Max and Gallipoli. More recent successes included Shine, Rabbit-Proof Fence, and Happy Feet. Australia’s diverse landscapes and cities have served as primary locations for many other films, such as The Matrix, Peter Pan, Superman Returns, and Finding Nemo. Recent well-known Australian actors include Judith Anderson, Errol Flynn, Nicole Kidman, Hugh Jackman, Heath Ledger, Geoffrey Rush, Toni Collette, Naomi Watts, and current joint director of the Sydney Theatre Company, Cate Blanchett.

Australian literature has also been influenced by the landscape; the works of writers such as Banjo Paterson, Henry Lawson, and Dorothea Mackellar captured the experience of the Australian bush. The character of colonial Australia, as represented in early literature, is popular with modern Australians. In 1973, Patrick White was awarded the Nobel Prize in Literature, the only Australian to have achieved this. Colleen McCullough, Thomas Keneally, David Williamson, and David Malouf are also renowned writers.

Australia has two public broadcasters (the Australian Broadcasting Corporation and the multicultural Special Broadcasting Service), three commercial television networks, several pay-TV services, and numerous public, non-profit television and radio stations. Each major city has daily newspapers, and there are two national daily newspapers, The Australian and The Australian Financial Review. According to Reporters Without Borders in 2008, Australia was in 25th position on a list of 173 countries ranked by press freedom, behind New Zealand (7th) and the United Kingdom (23rd) but ahead of the United States (48th). This low ranking is primarily because of the limited diversity of commercial media ownership in Australia; in particular, most Australian print media are under the control of News Corporation and Fairfax Media.

Australian food traditions have largely been shaped by those that have settled in Australia. Throughout the majority of Australian history, Australian cuisine was based on traditional Indiginous bushfood using native berries, fruit, fish, kangaroo and even insects such as the Witchetty grub. Later, British food was introduced, brought to the country by the first British settlers, with the Sunday roast an enduring tradition in many Australian families. In the 19th and especially 20th century, food began to reflect the influences of Mediterranean and Asian cultures, introduced by many immigrants who arrived in Australia during this period. Today, food from all over the world is popular in Australia, with Chinese, Thai, Indian, Italian and Mexican cuisine standing out.

The Programme for International Student Assessment for 2006 ranks the Australian education system as 6th on a worldwide scale for Reading, 8th for Science and 13th for Mathematics. The Education Index, published with the UN’s Human Development Index in 2008, based on data from 2006, lists Australia as 0.993, amongst the highest in the world, tied for first with Denmark, Finland and New Zealand.

Education is compulsory up to an age specified by legislation; this age varies from state to state but is generally 15-17, that is prior to completing secondary education. Post-compulsory education is regulated within the Australian Qualifications Framework, a unified system of national qualifications in schools, vocational education and training (TAFE) and the higher education sector (university).

The academic year in Australia varies between institutions, but generally runs from late January/early February until mid-December for primary and secondary schools, with slight variations in the inter-term holidays and TAFE colleges, and from late February until mid-November for universities with seasonal holidays and breaks for each educational institute.

Approximately 58% of Australians aged from 25 to 64 have vocational or tertiary qualifications, and the tertiary graduation rate of 49% is the highest among OECD countries. The ratio of international to local students in tertiary education in Australia is the highest in the OECD countries.

The second largest religion in Australia is Buddhism (2.1%), followed by Islam (1.7%), Hinduism (0.8%) and Judaism (0.5%). Overall, fewer than 6% of Australians identify with non-Christian religions. Weekly attendance at church services in 2004 was about 1.5 million: about 7.5% of the population. Religion does not play a central role in the lives of much of the population, although young adults are somewhat more religious than their elders.

The churches with the largest number of members are the Roman Catholic Church in Australia, the Uniting Church in Australia, and the Anglican Church of Australia. The Pentecostal churches and charismatic movement are also present with megachurches being found in most states (for example, Hillsong Church and Paradise Community Church). The National Council of Churches in Australia is the main Christian ecumenical body.

Hindus are a religious minority in Australia of roughly 150,000 adherents according to the 2006 census. In the 19th century, Hindus first came to Australia to work on cotton and sugar plantations. Many remained as small businessmen, working as camel drivers, merchants and hawkers, selling goods between small rural communities. These days many Hindus are well educated professionals in fields such as medicine, engineering, commerce and information technology. As a community Hindus live relatively peacefully and in harmony with the local populations, and recent times have seen an influx of Hindu students and labourers into Australian society.

The first interaction that Islam had with Australia was through the Muslim fishermen from Makassar in Indonesia who visited North-Western Australia long before 1788. This can be identified from the graves they dug for their comrades who died on the journey, which face Mecca in Arabia in accordance with Islamic regulations concerning burial, as well as evidence from Aboriginal cave paintings and religious ceremonies which depict and incorporate the adoption of Makassan canoe designs and words.

The history of the Jews in Australia began with the transportation of 8 Jewish convicts aboard the First Fleet in 1788 when the first European settlement was established on the continent. Today, an estimated 110,000 Jews reside in Australia, the majority being Ashkenazi Jews of Eastern European descent, with many being refugees and Holocaust survivors who arrived during and after World War II.

According to the Australian census in 2001, Buddhism is the largest non-Christian religion in Australia, with 357,813 adherents, or 1.9% of the total population. It was also the fastest growing religion in terms of percentage, having increased its number of adherents by 79% since the previous census in 1996. Although the first concrete example of Buddhist settlement in Australia was in 1848, there has been speculation from some anthropologists that there may have been contact hundreds of years earlier. In the mid to late 19th century, groups of Buddhists arrived from China, Japan and Sri Lanka. The first instance of a monk in residence in Australia was in the 1970s, and Buddhism gradually grew after that, mainly due to Asian immigration.

Sikhs have been in Australia since the 1830s, initially coming to work as labourers in the cane fields and as cameleers, known as Ghans. At the turn of the century a number of them were working as hawkers, opening up stores. After World War I, Sikhs in Australia were given rights far greater than other Asians and made use of them by emigrating to Australia and working as labourers. As the decades passed they formed a sizable community in Woolgoolga, where the first Gurdwara, named the First Sikh Temple, was built. Following the end of the White Australia Policy there has been a great increase in the number of Sikhs from a number of countries including India, Malaysia, Fiji and the United Kingdom. The 2006 Australian Census shows about 26,500 followers, up from 17,000 in 2001 and 12,000 in 1996.

Australia is one of the least devout nations in the developed world, with religion not described as a central part in many people’s lives. This view is especially prominent among Australia’s youth, who were ranked as the least religious worldwide in a 2008 survey conducted by The Christian Science Monitor. As of 2006, there are 3,706,555 people in Australia with purely secular beliefs, categorised by ABS as "No Religion". This category includes just 4 named sub-categories, namely agnosticism, atheism, Humanism and rationalism. A 5th sub-category is "No Religion, nfd" (nfd=no further definition).

Australian English began diverging from British English shortly after the foundation of the Australian penal colony of New South Wales in 1788. British convicts sent there, (including Cockneys from London), came mostly from large English cities. They were joined by free settlers, military personnel and administrators, often with their families. However, a large part of the convict body were Irish, with at least 25% directly from Ireland, and others indirectly via Britain. There were other populations of convicts from non-English speaking areas of Britain, such as the Welsh and Scots. English was not spoken, or was poorly spoken, by a large part of the convict population and the dominant English input was that of Cockney from South-East England.

In 1827 Peter Cunningham, in his book Two Years in New South Wales, reported that native-born white Australians of the time known as "currency lads and lasses", spoke with a distinctive accent and vocabulary, with a strong Cockney influence. The transportation of convicts to Australia ended in 1868, but immigration of free settlers from Britain, Ireland and elsewhere continued.

The first of the Australian gold rushes, in the 1850s, began a much larger wave of immigration which would significantly influence the language. During the 1850s, when the UK was under economic hardship, about two per cent of its population emigrated to the Colony of New South Wales and the Colony of Victoria.

Among the changes wrought by the gold rushes was "Americanisation" of the language, the introduction of words, spellings, terms, and usages from North American English. The words imported included some later considered to be typically Australian, such as dirt and digger. Bonzer, which was once a common Australian slang word meaning "great", "superb" or "beautiful", is thought to have been a corruption of the American mining term bonanza, which means a rich vein of gold or silver and is itself a loanword from Spanish. The influx of American military personnel in World War II brought further American influence; though most words were short-lived; and only okay, you guys, and gee have persisted.

Since the 1950s the American influence on language in Australia has mostly come from pop culture, the mass media (books, magazines and television programs), computer software and the internet. Some words, such as freeway and truck, have even been naturalised so completely that few Australians recognise their origin.

One of the first writers to attempt renditions of Australian accents and vernacular was the novelist Joseph Furphy (a.k.a. Tom Collins), who wrote a popular account of rural New South Wales and Victoria during the 1880s, Such is Life (1903). C. J. Dennis wrote poems about working class life in Melbourne, such as The Songs of a Sentimental Bloke (1915), which was extremely popular and was made into a popular silent film (The Sentimental Bloke; 1919). John O’Grady’s novel They’re a Weird Mob has many examples of pseudo-phonetically written Australian speech in Sydney during the 1950s, such as "owyergoinmateorright?" ("How are you going, mate? All right?"). Thomas Keneally’s novels set in Australia, particularly The Chant of Jimmie Blacksmith, frequently use vernacular such as "yair" for "yes" and "noth-think" for "nothing". Other books of note are "Let Stalk Strine" by Afferbeck Lauder – where "Strine" is "Australian" and "Afferbeck Lauder" is "alphabetical order" (the book is in alphabetical order) – and "How to be Normal in Australia" by Robert Treborlang.

British words such as mobile (phone) predominate in most cases. Some American and British variants exist side-by-side; in many cases – freeway and motorway, for instance – regional, social and ethnic variation within Australia typically defines word usage.

Australian English is most similar to New Zealand English, due to their similar history and geographical proximity. Both use the expression different to (also encountered in British English, but not American) as well as different from.

Words of Irish origin are used, some of which are also common elsewhere in the Irish diaspora, such as bum for "backside" (Irish bun), tucker for "food", "provisions" (Irish tacar), as well as one or two native English words whose meaning have changed under Irish influence, such as paddock for "field", cf. Irish páirc, which has exactly the same meaning as the Australian paddock.

Australia adopted decimal currency in 1966 and the metric system in the 1970s. This, too has affected Australian English.

According to the 2001 census, English is the only language spoken in the home for around 80% of the population. The next most common languages spoken at home are Chinese (2.1%), Italian (1.9%), and Greek (1.4%).

A considerable proportion of first and second generation migrants are bilingual. It is believed that there were between 200 and 300 Indigenous Australian languages at the time of first European contact. Only about 70 of these languages have survived, and many are only spoken by older people; only 18 Indigenous languages are still spoken by all age groups.

An indigenous language remains the main language for about 50,000 (0.25%) people. Australia has a sign language known as Auslan, which is the main language of about 6,500 deaf people.

Europe bananaseeans first landed in the 1600s and 1700s, but colonization only started in 1788.

The overall level of immigration has grown substantially during the last decade and a half. Net overseas migration increased from 30,042 in 1992-93 to 177,600 in 2006-07. This is the highest level on record. The largest components of immigration are the skills migration and family re-union programs. In recent years the mandatory detention of unauthorized arrivals by boat has generated great levels of controversy.

During 2004-05, 123,424 people immigrated to Australia. Of them, 17,736 were from Africa, 54,804 from Asia, 21,131 from Oceania, 18,220 from the United Kingdom, 1,506 from South America, and 2,369 from Eastern Europe.

131,000 people migrated to Australia in 2005-06 and migration target for 2006-07 was 143,000. The planning level for the 2007–08 Migration Programme has been set in the range of 142 800 to 152 800 places, plus 13 000 in the Humanitarian Programme. In 2008-09 about 300,000 new migrants were expected to arrive in Australia, the highest number since World War II. However, in March 2009, the Australian Government announced a 14 per cent cut in the 2008-09 permanent skilled migration program intake from 133 500 to 115 000 in response to worsening economic conditions. In November 2009, specific skills are still in shortage in Australia, especially in the areas of Health and Social Welfare. Wolds Agencies (Migration) is seeing an increase in the number of Job vacancies in these areas.Wolds Agencies also started to illustrate that some of the non-capital cities in Australia should be considered by intending migrants, not least those with specialized skills.

In 2001, 23.1% of Australians were born overseas; the five largest immigrant groups were those from the United Kingdom, New Zealand, Italy, Vietnam, and China. Following the abolition of the White Australia policy in 1973, numerous government initiatives have been established to encourage and promote racial harmony based on a policy of multiculturalism. In 2005–06, more than 131,000 people emigrated to Australia, mainly from Asia and Oceania. The migration target for 2006–07 was 144,000. The total immigration quota for 2008–09 is around 300,000—its highest level since the Immigration Department was created after World War II.

Australia’s population has grown from an estimated population of about 350,000 at the time of British settlement in 1788 due to numerous waves of immigration during the period since. Also due to immigration, the European component of the population is declining as a percentage, as it is in many other Western countries.

Although Australia has scarcely more than two persons per square kilometre of total land area, this raw figure is highly misleading: most of the continent is desert or semi-desert and of limited agricultural value. Consequently, Australia is one of the world’s most urbanized countries with an urban population of 89%.

The life expectancy of Australia in 1999-2001 was 79.7 years, among the highest in the world.

Most of the estimated 22 million Australians are descended from colonial-era settlers and post-Federation immigrants from Europe, with almost 90% of the population being of European descent. For generations, the vast majority of immigrants came from the British Isles, and the people of Australia are still mainly of British or Irish ethnic origin. In the 2006 Australian census, the most commonly nominated ancestry was Australian (37.13%), followed by English (31.65%), Irish (9.08%), Scottish (7.56%), Italian (4.29%), German (4.09%), Chinese (3.37%), and Greek (1.84%).

Australia’s population has quadrupled since the end of World War I,[87] spurred by an ambitious immigration program. Following World War II and through to 2000, almost 5.9 million of the total population settled in the country as new immigrants, meaning that nearly two out of every seven Australians were born overseas. Most immigrants are skilled, but the immigration quota includes categories for family members and refugees.

Since 2000 household incomes in Australia and New Zealand have been growing rapidly and in 2007 incomes were comparable to those in the United States.

New Zealand and Australia are gradually being economically integrated through a process known as “Closer Economic Relations (CER)”. Their citizens are free to travel, live and work in either country. Information about their relative median household incomes is of interest, especially for those considering migration.

Income data for each state (or territory) has been converted to US dollars using Purchasing Power Parity for private consumption. This is done because it provides a more accurate and stable assessment of the true value of citizens’ incomes in diverse countries.