The original inhabitants of Australia form only a small minority of the current population. The country's name is derived from the Latin Terra Australis Incognita, a term used to describe an undiscovered "great south land" that Spanish and Portuguese explorers set out to find in the 16th and 17th centuries. The island was first sighted by Europeans as they charted new trade routes to the East Indies. The most famous was Captain James Cook, who found the island in 1786 and claimed the eastern part for Great Britain as New South Wales. Originally established as a British penal colony, the first shipment of convicts arrived on 26 January 1788. The discovery of economic potential and the immigration of free settlers eventually ended the island's status as a penal colony in the 1840s. In 1901, Australia became an independent commonwealth.
On 6 November 1999, 55% of Australian voters rejected a referendum to replace the British monarch, Queen Elizabeth II, as their head of state. Thus, Australia remains a democratic state within the British Commonwealth of Nations, although 45% of those who voted would like to see the country become an independent republic. The formal head of state is Queen Elizabeth II, who is represented by an appointed governor-general. Real political power rests in the Parliament, which is bicameral. The lower house, the House of Representatives, has 148 members who are elected for three-year terms, each representing a single electoral district. The upper house, the Senate, has 76 members who serve six-year terms. Each senator is one of 12 who represents a single state. Most legislation is initiated in the House and sent to the Senate for ratification. Like many parliamentary systems, the House of Representatives is the more powerful of the two. The party or coalition of parties that controls the House also forms the government. Though the prime minister is traditionally a member of the House, cabinet ministers are often members of the Senate. The government need not hold a majority in the Senate and usually does not. Voting in national elections has been compulsory since 1924 and voter turnout in national elections generally exceeds 95%. The franchise extends to every citizen over the age of 18. There are five major political parties in Australia. Those currently in power are the Liberal Party and the National Party, conservative parties which have always governed in coalition anytime they held a majority in parliament. In 1996, they replaced the left-leaning Labor Party, whose leader, Paul Keating, resigned from the post after losing the election to John Howard. The Liberal-National coalition was returned to power in a 1998 election, when Howard defeated Kim Beazley, the Labor Party leader. The two smaller parties, the Democratic Labor Party and the Australian Democratic Party, are influential, primarily in the Senate.