Grand Prix racing in Australia was first held in 1928 at Phillip Island, only two years after the British Grand Prix had been established, and prior to one being run on the famous Monaco street circuit. A British racer, Captain A.C. Waite, won the inaugural event, staged over 100 miles (161 km) on an unsurfaced and potholed 6.5 mile (10.5 km) track. Grand Prix racing continued at Phillip Island until 1935, during which time Melbourne driver Bill Thompson won the event three times. Point Cook hosted one Grand Prix race in 1948, and in 1953 the race was held for the first time at the Albert Park circuit. In 1956 the event was held for a second time at Albert Park during the period of the Olympic Games, and the race was won by Stirling Moss. It was not held again in Albert Park until 1996, as a result of the 1958 decision by the Victorian Liberal-Country Party Government to ban any further motor racing at the Albert Park venue so that it could be reserved as a public park with full and free access. Sandown held six Grand Prix races between 1964 and 1978, and five were held at Calder Park between 1980 and 1984.
On 17 December 1993 Victorian Premier Jeff Kennett announced that a contract had been signed with Formula One promoter Bernie Ecclestone to hold the Australian Grand Prix at Albert Park, where it has been staged since 1996. Securing the rights to the Australian Grand Prix was part of a broader Liberal Government strategy that aimed to attract major events to Melbourne. In order to ensure that the Grand Prix was held at Albert Park, the State Government passed the Australian Grand Prix Act (AGPA) in October 1994. The AGPA exempted the Grand Prix from a number of Acts of Parliament, created the Australian Grand Prix Corporation, and removed the jurisdiction of the Supreme Court in matters relating to the event. In practice, the AGPA meant that local residents had no legal recourse, the Grand Prix was exempt from planning regulations, and an independent corporation was deemed to be in lawful possession of public land.
Strong community protest against Grand Prix racing at Albert Park was manifest most visibly in the Save Albert Park group, established in February 1994. Despite government claims that the event was well attended and provided significant economic benefits, the Save Albert Park group was able to highlight the Grand Prix's negative impact on the environment, the health and safety of local residents and the ability of local sports users to access adequate facilities.