New South Wales, a member state of the federal Commonwealth of Australia, was founded 26 January 1788 as a penal colony when Britain annexed over two-thirds of the Australian continent. NSW was later separated into Tasmania (1825, settled 1803), South Australia (1834, settled 1836), Victoria (1851, settled 1834), Northern Territory (1863, incorporated as a federal territory in 1910, yet to achieve full statehood), Queensland (1859, settled 1824), and the Australian Capital Territory (1911). With an area of 310,372 square miles and 6,115,100 inhabitants (1995), of whom 3,736,000 reside in its state capital, Sydney, NSW is the most populous state. For a long time dominated by its convict past, NSW eventually became a thriving self-governing colony, utilizing its savannah grasslands to establish one of the world's largest wool-producing industries, and its coal, mineral, and forest resources to found manufacturing industries; and, with the advent of inland railways (1870–1900), extensive wheat-farming.

With its convict heritage, large unionized industrial population, and somewhat left-of-centre political attitudes, as well as its leading role in the export of wheat and wool, and Sydney's position as Australia's major stock exchange and growing importance as a company headquarters city, NSW is politically and economically Australia's most powerful state. Sydney's pre-eminence has been achieved against strong competition from Melbourne (1995 population 3,197,800), which long regarded itself as the more important financial and company centre. Sydney, with its famous bridge, ocean beaches (Bondi and Manly), and even more famous opera-house, provides Australia with its most readily identified international images.

Martyn Webb