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Owing to the low and erratic rainfall over most of the outback, combined with soils which are usually not very fertile, inland Australia is relatively sparsely settled. More than 90 percent of Australians live in urban areas on the coast. However the outback and the history of its exploration and settlement provides Australians with a culturally valued backdrop, and stories of swagmensquatters, and bushrangers are central to the national ethos. The song "Waltzing Matilda", which is about a swagman and squatters, is probably Australia's best internationally known and best-loved song.

Aboriginal communities in outback regions have not been displaced as they have been in areas of intensive agriculture and large cities, in coastal areas. For this reason a significant proportion of Australia's indigenous population lives in the Outback,[3] in areas such as the Anangu Pitjantjatjara Yankunytjatjara lands in northern South Australia.

The total population of the Outback in Australia declined from 700,000 in 1996 to 690,000 in 2006. Largest decline was noted in Outback NT, while Kimberley and Pilbara showed population increase during the same period. The sex ratio is 1040 males for 1000 females and 17% of the total population is indigenous.[4]