For indigenous Australia, the celebration is a sharp reminder of dispossession and repression. They call it alternately Invasion Day, Survival Day, or the Day of Mourning, and mark it with concerts and events in towns and cities across the continent.
Yesterday newspapers reflected concern at the dark side. Said Melbourne's Herald Sun: "Australia Day shame ... why it is becoming our most violent day."
Victorian police released statistics confirming the worst. They showed there were more assaults on Australia Day than any other public holiday in the state, with bashings almost double the average daily rate.
The number of assaults spiked from the average daily 69 to 121 in 2011 and 109 in 2012.
Deputy Police Commissioner Tim Cartwright said that while Australia Day was supposed to be the nation's proudest, it had become the most violent public holiday "by a long shot", fuelled by alcohol, drugs and large numbers of young people celebrating in warm weather.
"I look at these figures every year and I just shake my head," he said. "I can't understand why on Australia Day there's so much more violence."
Two years ago a VicHealth study, based on 10 years of police, ambulance and hospital data, confirmed that Australia Day was the nation's worst for drunkenness and violence among the young. Ambulance attendances for under-25 drunks, and injuries caused by assaults, doubled.
The violence has also been getting nastier, with glassings, king hits, knifings and large brawls now erupting. Innocent bystanders risk being caught in the fighting. This hit a brutal low at Sydney's Manly Beach in 2009 when thugs, many wearing Australian flags, struck out at "non-Anglo" passersby, and smashed cars and other property.
The violence extends to most of Australia's major cities, large towns and holiday centres. Wollongong, south of Sydney, is typical of many centres. Police numbers have been reinforced for the day, with plainclothes officers tasked to move among the crowds.
In Tasmania, police and medical authorities have issued new warnings about binge drinking tomorrow in the face of rising Australia Day hospital admissions. At Royal Hobart Hospital last year 32 of the 150 emergency cases were for alcohol-related injuries, including 14 assault victims and two major trauma patients with injuries including broken bones and deep cuts. Two unconscious teenagers were admitted with acute alcohol poisoning.
LaTrobe University anthropologist Dr Nicholas Herriman says Australia Day has become a "heavily hyped, high-spirited and inebriated national ritual" that gives a minority of young men a chance for drunken violence.
"Sporting singlets and thongs and draped in Aussie flags, they descend, after an afternoon of drinking, upon the cities and towns for a night of thuggery in the name of patriotism.
"Typically the violence expresses dominance and power. For young Aussie males it is a defiant announcement of their ownership of the country."
Herriman said that while many Australians might wish that their flag represented only the unity of the nation, it had come to also represent white racist values.
LaTrobe youth culture representative Elisabeth Betz noted that Australia Day violence implied "we are here, we can do this, and we can get away with it".
Herriman wrote: "As we celebrate this year, and especially when the inevitable news reports of violence begin trickling in on the following day, it would be worth reflecting critically upon the masculine and racist values of Australian culture and the way they are expressed on Australia Day."