opɯdʒɯlɯklɑr

The use of the term Anglo–Celtic in Australia has to do with the history of ethnic relations and the formation of the dominant identity in that country.

For a very long time, the Irish and their descendants, identified through Catholicism, were a separate and somewhat disadvantaged identity in Australia. They had trouble accessing the highest levels of power. They had separate schooling in the Catholic system. Sectarian conflict in the school yard, the workplace, and beyond was a real thing as late as the 1950s. And, with Aboriginal Australians decimated and marginalised, and the imposition of the White Australia policy, Catholic anglohone Australians were the most visible minority in Australia.

But the extent to which they were a minority should not be overstated. In most ways, Catholic and Protestant Anglophone Australians shared a common culture, and much of the time a common identity.

With the post war influx of Southern Europeans into Australia, people started to identify and discuss the dominant majority culture in the 70s. It was the culture that southern European Australians did not immediately fit into, and it needed a name. With British deprecated as an identity by then for descendants of the First Fleet, the first term people jumped on was Anglo.

But the memory of sectarian conflict among Anglophones was very recent. Catholic Anglophone Australians could grudgingly accept that they were part of a majority culture; but they would not accept being subsumed within a Protestant default, which is what Anglo (English) implies. They themselves had been the subalterns not that long ago. So out of sensitivity to this divide, the hybrid term Anglo–Celtic was coined.

The experience through the rest of the Anglosphere was different.

• England has had a Catholic minority for a couple of centuries, but it identifies its majority culture as English, not Anglo-Celtic.
• Scotland, Ireland, and Wales are Anglophone, but identify as Celtic.
• The dominant culture in the US was a Melting Pot of not only English and Celts, but also Dutch and Germans and Scandinavians. And that culture first defined itself not against Southern Europeans, but against Native Americans and Blacks. So the term it adopted was White.
• The dominant originally European identity in South Africa also defined itself against Blacks. And the divide between Afrikaners and Anglophones was much more profound than that between Protestant and Catholic Anglophones. So there was no urgency to speak of Anglo-Celtic South Africans.
• I don’t know as much about Canada, but the dominant Anglophone Protestant identity there defined itself against French Canadians first, and Celtic Canadians second. So after British passed out of fashion, Anglpohone was readily adopted, and presumably did not disgruntle Celtic Canadians unduly.
• The dominant identity in New Zealand had to define itself from the beginning against the Maori, who are not decimated and put out of mind the way that Australian aboriginals were. Like in Australia, that identity initially defined itself as British. Like in the US, that identity ended up defining itself racially, as not Polynesian, using the Maori word Pakeha.

All the answers given here have been excellent. I particularly liked Kai Neagle’s.

Several factors have contributed to Australia recently turning into postwar Italy, and most of them have already been pointed out.

• Labor has always been factionalised. The Liberals have become much more factionalised recently, with the resurgence of the reactionary right.
• Both parties have moved to The Mushy Centre. As a result, there is not a lot of sunlight between them, and there is pressure on them from their extremes: from the Greens, and from One Nation and other right wing populists.
• This has made the parties much more managerial than ideological, and accordingly much more prone to panic at poll results rather than sticking it out. If you don’t have an ideology, the only reason you are in power is to stay in power.
• Labor as a movement has suffered much more from the Twilight of the Ideologies, the demise of socialism, and the Hawke-Keating neoliberal reforms. So the cracks were always going to show there first.
• Labor was also structurally more prone to do this kind of thing, to begin with.
• Pundits at the time talked of federal Labor contracting Sussex Street disease—referring to NSW Labor, which has always been much more ruthless.
• The unionist Paul Howes, who was instrumental in toppling Rudd for Gillard, was derided as one of Labor’s faceless men. The insult is 50 years old: it comes from Menzies. The only difference with Howes is that he didn’t stay faceless: he gave TV time to anyone who would ask.

Many of these factors are shared throughout the Western world, and other answers have already mentioned them. They don’t explain why Australia has remained unstable. Others have brought up procedural reasons, which are beyond my expertise. I’ll offer a simpler reason.

Precedent.

Yes, the party leader is leader only by the grace of the party room. But toppling a sitting prime minister used to be Unthinkable. And the country was shell shocked when Rudd was toppled. I was in Melbourne’s Fed Square when it happened, and I remember dozens of us staring mouths agape at the TV screens.

Once it happened, the unthinkable became thinkable. And eventually, expected.

My fellow nationals, let us not hide behind our finger. (I think that’s a Greek expression.) Yes, I’m sure none of us here are racist. But racism against Aboriginal Australians is there, and visitors to Australia regularly manage to chronicle it. (It’s the one dark aspect of Bill Bryson’s otherwise panegyrical Down Under/In A Sunburned Country.) Wishing them all dead is something some Australians say, and it’s a rather more extreme attitude than you’ll hear elsewhere in the New World—even the US, which historically excluded Native Americans from their Manifest Destiny.

Yes, Australians are not as circumspect about how they talk in general, and that means that there’s a lot of talk that can come across as racist, but is often just undeferential or radically egalitarian. But that’s not what we’re talking about here.

There are a couple of issues people might point to, but I don’t think they’re the explanation.

• Guilt? No, guilt doesn’t explain contempt.
• Embarrassment? Yes, situations in outback Australia are often third-world. I still don’t think that’s cause though; it’s effect. Though not knowing what to do about Aboriginal disadvantage is a challenge that other Australians, with their notions of egalitarianism and a fair go, don’t welcome. After all, Aboriginal Australians were not originally meant to be part of the Aussie fair go.
• Land claims? No, that’s just an inconvenience to miners and pastoralists, and after the initial shock of the Mabo judgement, it has settled down into a regimen of arbitration. The initial panic that Aboriginal Australians would be claiming swaths of suburbia and kicking white householders out proved to be fantasy.
• Not wanting to be lectured at by left-wing defenders of virtue? There’s some of that ressentiment, and you can see it in the libertarian cause célèbres, such as the racial defamation suits against Andrew Bolt or the threats of same against Bill Leak. But though Bolt and Leak are reactionary and reactive, sneering at “light-skinned” Aboriginal activists or deriding the lack of strong family cohesion in Aboriginal communities doesn’t quite rise to the level of the fantasy genocide OP describes (and I’m pretty sure has not made up).

I think the underlying issue, beyond all the current controversies and cluelessness, was the narrative that got entrenched in the 19th century. That narrative was that Australian Aborigines were the most primitive people on earth, and that they deserved to die out by Darwinian imperative. For decades, the government’s paternalism towards Aborigines was akin to palliative care.

The notion of Aboriginal Australians living a traditional lifestyle was that they were museum pieces and savage; remember, they did not get the vote until 1966, and until then they were wards of the State. The notion of Aboriginal Australians living a Western lifestyle was that they needed to be whitewashed and assimilated, and severed from their savage antecedents; hence the Stolen Generations.

Most people consciously realise that those attitudes are wrong; but the subterranean discomfort is still there. This was all ostensibly ancient history by the time of my childhood, but I have recognised in myself a sense of discomfort around Aboriginal Australians. These archetypes die hard, and they only die in sunlight.