Australian Grands Prix, not part of the World Championship but featuring F1 open-wheeler racing vehicles, were held at various circuits around Australia for many years. A notable venue in the 1950's was a road circuit at Albert Park in Melbourne, for many years. They sometimes attracted the world's top drivers of the era, who competed against (and were challenged by) local entrants. The last such race was held in 1982.
Australia became part of the F1 world championship in 1985 with the last race of the season held on a street circuit in Adelaide. The circuit, whilst not as ridiculously tight as Monaco, was notoriously tough on drivers and gearboxes. The most famous race there was undoubtedly the 1986 event, where Nigel Mansell, and Nelson Piquet in a Williams, and Alain Prost in a comparatively underpowered McLaren were still competing for the title. Mansell needed only third to guarantee the title, whilst Prost and Piquet needed to win and for Mansell to finish lower than third to take the title. Whilst leading comfortably with a few laps to go, Mansell's Williams suffered a spectacular mechanical failure, with the right rear wheel flying off at very high speed near the end of the main straight creating a huge shower of sparks as the floor of the vehicle dragged along the bitumen surface. Mansell fought to control the violently veering car and steered it to a safe stop. Prost took the lead and won the race and the championship. Prost himself came incredibly close to failure, as his vehicle coasted to a halt on his warm-down lap, out of fuel.
In 1996, after the government of Jeff Kennett spent an undisclosed (but speculated to be quite large) amount, the race was shifted to a rebuilt Albert Park street circuit in Melbourne. The decision to hold the race there was controversial. A series of protests were organised by the "Save Albert Park" group, who claimed that the race turned a public park into a private playground for much of the year. Additionally, they claimed that the race cost a great deal of money that would be better spent, if it was to be spent on motor racing, on a permanent circuit elsewhere. Finally, they claimed that the economic benefits of the race claimed by its backers were false or exaggerated. The race organisers and the government claimed that the economic benefits to the state outweighed the costs, and that the park's public amenities have been improved considerably by the works carried out for the race. The idea of a permanent racing circuit has never really been addressed, but there is much speculation that the real reason for a street circuit is to provide a distinctive backdrop for television - a permanent race circuit would be unidentifiable and, from the perspective of the Formula One organisers, may as well be held in Europe at much lesser cost and inconvenience to them.
In any case, a substantial number of people do embrace (and attend) the race at the Albert Park track, which for a street (or at least "semi-street" - many of the roads have been rebuilt specifically with the Grand Prix in mind) circuit is relatively fast and open and offers a few overtaking opportunities.
The race was struck by tragedy in 2001, when a flying tyre from a crash between Ralf Schumacher and Jacques Villeneuve flew through a gap in the barrier fence and killed a volunteer track marshal.
The 2002 event saw the best performance by an Australian driver when Mark Webber, in the perennially uncompetitive Minardi, took advantage of the misfortune of other competitors to finish an unlikely fifth, holding off a fast-closing Mika Salo in a much faster Toyota. He and the Australian-born team owner Paul Stoddart became instant national celebrities well beyond the motor racing world, the minor placing receiving far more attention in Australia than Michael Schumacher's win.