February onwards – The worst drought in 100 years affects most of Australia, with water restrictions being put in place in Sydney, Melbourne and many other areas, and farmers being devastated by crop failures.
19 February - An independent inquiry is ordered into claims that Governor-General Peter Hollingworth ignored sexual abuse claims.
4 March- Bankrupt airline Ansett Australia formerly ceases all operations, with its final flights that had been operating on a scaled-down version of the once major carrier, flying for the last time. The airline's remaining 3,000 staff members are made redundant and the company falls into the history pages permanently after 66 years of operation.
9 March - Amnesty International's Secretary, Irene Khan, criticised Immigration Minister Philip Ruddock for not allowing access to the Woomera Detention Centre after two detainees are injured in protests.
12 March - Liberal Senator Bill Heffernan alleges that High Court judge Michael Kirby trawled the streets of Sydney looking for underage rent boys.
15 March - Prime Minister John Howard goes to London to meet the Presidents of South Africa and Nigeria, as the Commonwealth decides whether to suspend Zimbabwe.
19 April - New South Wales Premier Bob Carr officially opens the Ridgeway Gold Mine near Orange.
1 May - Prime Minister John Howard and Japanese Prime Minister Koizumi agree to strengthen trade and security links between Australia and Japan.
23 May - Queensland police investigate the circumstances surrounding the death of 70-year-old Gold Coast widow Nancy Crick, who took her own life on 21 May in the company of 20 friends and family, after a long battle with immense pain brought on by an inoperable bowel condition.
27 May - Victorian Premier Steve Bracks defends his government against criticism by the Catholic Church over stem cell research.
30 May - The Victorian Government announces a package of reforms to address the public liability insurance crisis.
8 July - Prime Minister John Howard makes a pilgrimage to the Greek-Australian War Memorial in Crete.
17 July - Prime Minister John Howard confirms that paid maternity leave is under active consideration by the Federal Government.
20 July – The ALP government of Jim Bacon is re-elected for a second term in Tasmania.
2 August - Prime Minister John Howard announces that Australia will be asked to help in an imminent American attack in Iraq.
6 August - Clothing manufacturer Pacific Brands grants female staff 12 weeks' maternity leave on full pay in a landmark workplace deal.
12 August - Wheat farmers blame the Federal Government for causing the cancellation of $820 million in wheat contracts with Iraq.
16 August - The Federal Government appoints a cotton farmer, Dick Estens, to investigate the sale of Telstra. Federal Treasurer Peter Costello tours outback Queensland where he advocates for the full sale of Telstra.
19 August - Tasmanian Premier Jim Bacon urges the Victorian Government not to abandon the Baselink development which will link Tasmania to the mainland electricity grid.
20 September - A matter involving allegations of a serious criminal offence against Queensland Chief Magistrate Di Fingleton is referred to the Crime and Misconduct Commission for investigation.
Indonesian President Megawati pleads with Prime Minister John Howard to lift the travel advice warning to Australians to stay out of Indonesia.
14 November - Bali bomber Amrozi smiles and laughs about the 2002 Bali bombings in an Indonesian court, creating outrage in Australia.
30 November – In Victoria, the Labor government of Steve Bracks is re-elected for a second term.
11 December - Sex Discrimination Commissioner Pru Goward recommends a 14-week fully paid maternity leave scheme for Australian working women.
12 December - The High Court of Australia hands down its decision in the case of Yorta Yorta Aboriginal Community v. State of Victoria, dismissing the native title claim made by the Yorta Yorta peoples to land and waters covering 2,000 square kilometres along and around the Murray and Goulburn Rivers. The Yorta Yorta peoples sought recognition that they are the Indigenous peoples belonging, by tradition, to that country.
15 February – Steven Bradbury wins Australia's first Winter Olympic Games gold medal in the 1.000m men's short track speed skating. He only qualified for the finals after all the other competitors in his semifinal crashed, and in the final, he again saw all the other contenders crash in front of him.
17 February – Alisa Camplin wins gold in the women's aerial skiing contest. The favourite, Jacqui Cooper, also from Australia, severely injured herself whilst training & was out of action for some time.
August – The Bulldogs are deducted 37 competition points after breaking the salary cap scandal, which saw them fined half a million dollars and relegated from minor premiers to wooden spooners for 2002.