Police could get further powers to crack down on "ridiculous" neo-Nazis who tried to drum up support for a racist revolution on Australia Day.
The group of about 60 hooded men, mostly wearing black masks and clothes, gathered in Artarmon on Sydney's north shore before boarding a city-bound train on Friday.
But the group's plans to march through the city were thwarted by quick-acting police who halted the train at North Sydney station.
Six people were arrested and taken to Chatswood Police Station and a further 55 men were fined for offensive behaviour.
Australian neo-Nazi leader Thomas Sewell was among those ordered to stay out of the Sydney CBD on public safety grounds.
The group later marched through northern Sydney, closely observed by police.
Condemning the "obnoxious, objectionable, racist" behaviour, NSW Premier Chris Minns had a clear message for fascists and neo-Nazis.
"You are not welcome here," he said.
"This sort of ridiculous behaviour is so out of keeping with the kind of culture that we have built up in this state."
Nazi symbolism has been outlawed in NSW but the premier was open to strengthening the laws concerning so-called white power salutes.
"We've shown in the very recent past we're prepared to act to keep the public safe and promote community harmony," he said.
Prime Minister Anthony Albanese said the head of Australia's domestic spy agency had repeatedly warned of the rise of neo-Nazis and right-wing extremism.
"It has no place and it has rightly been condemned by all decent people," he said.
A prominent Australian Jewish leader meanwhile commended the swift police response while saying the neo-Nazis had "much in common with the pro-Palestinian element that has latched" onto Australia Day protests.
"They support fascism and violence," Executive Council of Australian Jewry co-CEO Alex Ryvchin said.
"They want to destroy our country and they are obsessed with anti-Jewish conspiracies.
"This incident reminds us how fragile our social order is and the need for vigilance in the face of violent movements intent on spreading lies, hatred and fear."
Tens of thousands of demonstrators attended Invasion Day rallies in all major cities on Friday, calling for Australia Day to shift to another date and for better treatment of Indigenous people.
"Invasion Day has always been about our communities' resilience, strength and demands and this year is no different," Widjabul Wia-bal woman and GetUp chief executive Larissa Baldwin-Roberts said.
The second day of the cricket Test between Australia and the West Indies was briefly disrupted when demonstrators entered the Gabba and one invaded the pitch with an Aboriginal flag.
Indigenous heritage was also officially celebrated at events including through the projection of four Eora "trailblazers" onto the Sydney Opera House.
Millions of people across the nation celebrated and commemorated Australia Day, which marks the anniversary of the First Fleet arrival and raising of the Union Jack flag at Sydney Cove in 1788.
More than 22,000 people were officially welcomed as Australia's newest citizens in ceremonies held across the nation.
The prime minister attended a citizenship ceremony in Canberra and said Australia was richer for having more people choose to call it home.
NSW police were mostly pleased with the community's behaviour.
"Considering the hot weather and significant crowds enjoying events, the vast majority celebrated safely, which made for a family-friendly day," Assistant Commissioner Stephen Hegarty said.
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