Why was Canberra chosen as Australia's capital?

Canberra was chosen as Australia's capital through a long process of political compromise between Sydney and Melbourne, the two largest cities in the new federation, neither of which was willing to see the other become the permanent capital. The compromise was formalised in section 125 of the Australian Constitution, which required that the capital be in New South Wales but at least 100 miles (160 kilometres) from Sydney. The Yass-Canberra district was selected as the actual site in 1908.

Sydney and Melbourne had competed intensely for the federal capital throughout the federation discussions of the 1890s. Sydney argued for its position as the country's oldest and largest city. Melbourne argued for its position as the wealthiest city and the practical centre of post-1851 Australian economic development. The compromise negotiated by NSW Premier Henry Parkes during the second round of federation referendums in 1899 required that the capital be in NSW (a concession to Sydney) but at least 100 miles from Sydney (a concession to Melbourne, which would not tolerate a capital in or near Sydney). Melbourne was to host Parliament temporarily until the new capital was ready.

Several sites in NSW were considered. The Royal Commission on the Seat of Government, appointed in 1903, recommended Tumut as the site, with Bombala as second choice. A 1906 Senate vote chose Dalgety in southern NSW, but the House of Representatives preferred Yass-Canberra and the two Houses could not agree. After further surveying and debate, the federal Parliament passed the Seat of Government Act 1908 selecting Yass-Canberra (the district around the village of Canberra in NSW) as the federal capital site, with the Seat of Government Acceptance Act 1909 formally transferring the territory from NSW to the Commonwealth.

The site had practical advantages. The Limestone Plains around Canberra offered open terrain suitable for city building. The Molonglo River provided water and the potential for the lake that would become a central feature of the city. The cooler climate (Canberra sits at 580 metres elevation) was thought to favour parliamentary work compared to the hot summers of Sydney. The site was central to the populated south-east of Australia and reasonably accessible to both Sydney and Melbourne, although the long distance from major cities remains a feature of Australian political life today. The name Canberra is thought to derive from the Ngunnawal Aboriginal word meaning 'meeting place', a designation that the federal capital was intended to fulfil.