Multicultural policy in Australia was developed by the Immigration Department, by most State governments and by individuals and groups involved in immigrant affairs. It remained within the Immigration portfolio from 1975 until 1987 and was returned to it in 1996. At the State level, where immigration is not a government function, it usually rested with the premier's office. It has not been essentially concerned with ‘culture’ in the conventional sense, so much as with immigrant settlement services. Not until 1989 were Aboriginal issues brought under the multicultural umbrella. This remained controversial and was not welcomed by many Aboriginal activists or organisations. They saw the Indigenous peoples as distinct and not merely one among many ethnic groups of recent settlement. Not until 2001 was Indigenous policy brought within the scope of the Immigration Department, which was renamed the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA). This acknowledged the responsibility for Aboriginal reconciliation transferred to the minister, Philip Ruddock, some months before. Responsibility for multiculturalism was then undertaken by a junior minister, Gary Hardgrave. The Labor shadow ministry also separated immigration from multiculturalism in 2001.

Multiculturalism replaced the long-standing support for assimilation. Yet it was not particularly controversial in the first decade when it was confirmed as Commonwealth public policy by the Galbally report of 1978 and reconfirmed by Malcolm Fraser in 1981.