Drought in Australia is defined by the Australian Bureau of Meteorology as rainfall over period greater than three-months being in the lowest decile of what has been recorded for that region in the past. This definition takes into account that drought is a relative term and rainfall deficiencies need to be compared to typical rainfall patterns including seasonal variations. Specifically, drought in Australia is defined in relation to a rainfall deficiency of pastoral leases and is determined by decile analysis applied to a certain area. Note that this definition uses rainfall only because long-term records are widely available across most of Australia. However, it does not take into account other variables that might be important for establishing surface water balance, such as evaporation and condensation.

Australia's climate is governed mostly by its size and by the hot, sinking air of the subtropical high pressure belt. This moves north-west and north-east with the seasons. The climate is variable, with frequent droughts lasting several seasons, thought to be caused in part by the El Niño-Southern Oscillation. Australia has a wide variety of climates due to its large geographical size. The largest part of Australia is desert or semi-arid. Only the south-east and south-west corners have a temperate climate and moderately fertile soil. The northern part of the country has a tropical climate, varying between grasslands and desert. Australia holds many heat-related records: the continent has the hottest extended region year-round, the areas with the hottest summer climate, and the highest sunshine duration.