On January 26, 1788, Captain Arthur Phillip guides a fleet of 11 British ships carrying convicts to the colony of New South Wales, effectively founding Australia. After overcoming a period of hardship, the fledgling colony began to celebrate the anniversary of this date with great fanfare and it eventually became commemorated as Australia Day. In recent times, Australia Day has become increasingly controversial as it marks the start of when the continent's Indigenous people were gradually dispossessed of their land as white colonization spread across the continent.

Australia, once known as New South Wales, was originally planned as a penal colony. In October 1786, the British government appointed Arthur Phillip captain of the HMS Sirius, and commissioned him to establish an agricultural work camp there for British convicts. With little idea of what he could expect from the mysterious and distant land, Phillip had great difficulty assembling the fleet that was to make the journey. His requests for more experienced farmers to assist the penal colony were repeatedly denied, and he was both poorly funded and outfitted. Nonetheless, accompanied by a small contingent of Marines and other officers, Phillip led his 1,000-strong party, of whom more than 700 were convicts, around Africa to the eastern side of Australia. In all, the voyage lasted eight months, claiming the deaths of some 30 men.

The first years of settlement were nearly disastrous. Cursed with poor soil, an unfamiliar climate and workers who were ignorant of farming, Phillip had great difficulty keeping the men alive. The colony was on the verge of outright starvation for several years, and the marines sent to keep order were not up to the task. Phillip, who proved to be a tough but fair-minded leader, persevered by appointing convicts to positions of responsibility and oversight. Floggings and hangings were commonplace, but so was egalitarianism. As Phillip said before leaving England: “In a new country there will be no slavery and hence no slaves.”

Though Phillip returned to England in 1792, the colony became prosperous by the turn of the 19th century. Feeling a new sense of patriotism, the men began to rally around January 26 as their founding day. Historian Manning Clarke noted that in 1808 the men observed the “anniversary of the foundation of the colony” with “drinking and merriment.”

In 1818, January 26 became an official holiday, marking the 30th anniversary of British settlement in Australia. As Australia became a sovereign nation, it became the national holiday known as Australia Day. Many Aboriginal Australians call it "Invasion Day."