By Nick Bryant
BBC News, Sydney
Ferry races across Sydney harbour, daredevil aerobatic displays and spectacular pyrotechnics overhead. The Australia Day holiday on 26 January is traditionally a time of carefree celebration.
Many Australians take to the beach on Australia Day
Thousands of families commemorate the establishment of the first British settlement in 1788 by basking in the sun at the beach or firing up the "barbie" in the backyard.
But this year, the lead-up to the country's national day has also been marked by a bout of countrywide introspection.
This has been brought about by a series of incidents and controversies which have fuelled the ongoing debate about the essence of national character and national identity - or, put more simply, what it is to be Australian in a country being overtaken by ethnic, religious and social change.
The week started with tabloid-fuelled public outrage over a decision by organisers of an outdoor rock concert in Sydney, the Big Day Out, to discourage the use of the Australian flag, out of fear it had become a symbol of racism and hate.
One organiser described the flag as a "gang colour", a reference to its use during the Cronulla riots in December 2005 when hordes of white protesters brandished the national flag as they launched attacks on Australians of Middle Eastern origin.
The concert had already been brought forward 24 hours to avoid any overtly nationalistic overtones.
The decision was political correctness gone mad, according to Australian politicians of all stripes - mindful no doubt of the upcoming federal elections in the back half of the year in which the question of national identity is likely to be a hot-button issue.
In past elections, Prime Minister John Howard has proved himself particularly adept at exploiting voter fears about the threat to Australian identity from asylum seekers and new immigrants.
Clashes marred the first day of the Australian Open
This year, a rejuvenated Labor Party, under its new leader Kevin Rudd, is determined not to be outflanked.
In condemning the organisers' decision, Mr Rudd was wrapping himself just as tightly in the flag as Mr Howard.
Even before the flag controversy erupted, ugly brawling on the first day of the Australian Open tennis championship in Melbourne between rival Australian-born Serbian and Australian-born Croatian fans had raised fresh fears about the viability of multiculturalism.
The violence was particularly shocking, for the battles of the Balkans were being played out at a tournament which prides itself on being known throughout the tennis world as the "Happy Slam", and in a city which claims to be the sporting capital of the world.
Most of the fans involved in the skirmishes came from Melbourne.
Sheikh Hilali has apologised for his comments
Then there was the latest offering from Australia's most senior Muslim cleric, Sheikh Taj el-Din al-Hilali, the mufti who late last year provoked outrage by suggesting that women who did not wear the Islamic veil had only themselves to blame for becoming victims of sexual assault.
Speaking on Egyptian television, Sheikh Hilali said that Muslims had a much greater right to be in Australia than whites.
"Anglo Saxons came to Australia in chains," he told the chat show Cairo Today, "while we paid our way and came in freedom. We are more Australian than them. Australia is not an Anglo-Saxon country - Islam has deep roots in Australian soil that were there before the English arrived."
Dodging reporters at Sydney Airport, the Sheikh returned overnight from a period of self-imposed exile in the Middle East.
His arrival made headline news, partly because the cleric has hinted that he might seek office in the forthcoming New South Wales state elections in the of hope attracting support from Muslims disenchanted with the main political parties. Another challenge to multiculturalism.
Nation in flux
Australia is one of the most ethnically diverse countries on the planet.
According to the 2001 census, 23% of the population were born overseas, while 43% of the population were either born overseas or at least had one parent born overseas.
The question being asked more frequently is whether Australia can be successful multi-culturally.
Prime Minister John Howard regularly touts his ideas for a so-called "Aussie test" for new immigrants hoping to become citizens - an examination both of historical knowledge and Australian values, like "mateship" and fair play.
In announcing a major cabinet reshuffle this week, he also renamed the Ministry of Immigration and Multicultural Affairs.
Quite deliberately, he dropped the reference to multiculturalism and replaced it with "citizenship".
On the question of multiculturalism, Australia is a nation in flux.
Derek Fine came to Australia 32 years ago from South Africa, and thinks that Australia is just as welcoming now as it was then. "If you come with the right attitude, then this is a great and fair country," he says.
But Jan Titterton is worried about the influx of new immigrants, and believes there should be stronger controls in place.
"I think Australia was successfully multicultural, but I don't think that at the moment. I don't think the government is paying any attention to who they are allowing in. It's just open season," she said.
"I do think you should ask a couple of questions: Do you hate Australians and do you believe in the Western way of life? We should stop the 50% Australians. If you want to be an Australian then get rid of your other passports."