 On 1 January 1901 , federation of the colonies was achieved after a decade of planning , consultation and voting . This established the Commonwealth of Australia as a dominion of the British Empire . The Federal Capital Territory ( later renamed the Australian Capital Territory ) was formed in 1911 as the location for the future federal capital of Canberra . Melbourne was the temporary seat of government from 1901 to 1927 while Canberra was being constructed . The Northern Territory was transferred from the control of the South Australian government to the federal parliament in 1911 . In 1914 , Australia joined Britain in fighting World War I , with support from both the outgoing Commonwealth Liberal Party and the incoming Australian Labor Party . Australians took part in many of the major battles fought on the Western Front . Of about 416 @,@ 000 who served , about 60 @,@ 000 were killed and another 152 @,@ 000 were wounded . Many Australians regard the defeat of the Australian and New Zealand Army Corps ( ANZACs ) at Gallipoli as the birth of the nation — its first major military action . The Kokoda Track campaign is regarded by many as an analogous nation @-@ defining event during World War II . 
