Yarra City councillors voted unanimously on Tuesday night to no longer refer to January 26 as Australia Day and end its tradition of holding citizenship ceremonies on that date in recognition of it being a day of distress for many Indigenous people.
Local residents' views are divided about the decision, with some angered by the outcome, while others believe it’s good for Indigenous people to be recognised.
Indigenous Resident Ros Sultan says "It's about taking out the party element because there is no reason for us to celebrate."
“The date chosen is an inappropriate date now given the knowledge we have via the Indigenous people."
Retired local Dave McCauley is angered that the council didn’t just ‘leave it’ and says January 26 is an important day to Australians and the main thing he does to celebrate is ‘drink’.
“The council did the wrong thing, Australia day is Australia day, it’s always been on the 26 since I’ve known.”
Retired local Jim Grisdale, who came to Australia as a young boy from England says we can pick any date but preferably one that’s more unifying.
“The date chosen is an inappropriate date now given the knowledge we have via the Indigenous people. The day that Captain Cook arrived and invaded their country doesn’t appear in this day and age to be an appropriate day. I’m happy to have an Australia day but I think there needs to be a compromise.”
The decision came despite a warning from Assistant Minister for Immigration and Border Protection Alex Hawke that councils could have their power to host citizenship ceremonies revoked if they politicise the events.
Mr Hawke on Wednesday blasted the council and branded its decision politically motivated.
"The government is today actively considering its options in response to Yarra Council's continued politicisation of Australian citizenship ceremonies in an attempt to undermine Australia Day 26 January as our national day," he told AAP in a statement.
"The Turnbull government has made its position repeatedly clear: councils must not use their ability to preside over citizenship ceremonies or determine the dates upon which they are held to in any way delegitimise Australia Day."
Huge protests were held at Australia Day events this year amid growing calls to find a new date for the national day because January 26 is seen as a day of mourning by many Indigenous people given it marks the anniversary of the First Fleet's arrival.
Yarra City mayor Amanda Stone said councillors considered the minister's warning before voting but decided a bold change was required.
"In the last 12 months there has been a groundswell of community support for change from both Aboriginal and non-Aboriginal people across the country," she said.
"People can still have their barbecues and parties on the January 26 public holiday but I hope our stance encourages people to stop and think about what this date really means in the history of our nation."
Prime Minister Malcolm Turnbull was disappointed by the council's decision, which will make it the first in the country to stop hosting citizenship ceremonies on Australia Day.
"The council is using a day that should unite Australians to divide Australians," he said.
"I recognise Australia Day, and its history is complex for many Indigenous Australians but the overwhelming majority of Australians believe the 26th of January is the day and should remain our national day."
Veteran Liberal senator Eric Abetz accused Ms Stone of being a "tin-pot" mayor and said Yarra City should stick to looking after ratepayers.
"The simple fact remains that Australia Day celebrates the beginning of the new modern Australia right, wrong or Indifferent and that is on the 26th of January," he told reporters.
Labor senator Doug Cameron said the democratically-elected council had the right to "do what they like" but was instead being heavied and threatened.