While Australia’s state capitals owe their existence to Britain, convicts, trade, defence or simple geography, Canberra owes its origin to political necessity. It was created because Australia decided, soon after it became a unified nation in 1901, that it needed an independent capital free from political or commercial domination by any one state.
New South Wales and Victoria (always strong rivals) were jockeying at the time for the privilege of housing Federal Parliament. NSW favoured Sydney; Victoria preferred Melbourne. An independently sited capital, surrounded by a neutral buffer zone, was the logical, diplomatic solution. The Australian Capital Territory (ACT) was established in 1911 as an administrative territory to encompass Australia’s proposed new capital.
The ACT is surrounded entirely by New South Wales.