This study presents the first multi-proxy reconstruction of rainfall variability from the mid-latitude region of south-eastern Australia (SEA). A skilful rainfall reconstruction for the 1783–1988 period was possible using twelve annually-resolved palaeoclimate records from the Australasian region. An innovative Monte Carlo calibration and verification technique is introduced to provide the robust uncertainty estimates needed for reliable climate reconstructions. Our ensemble median reconstruction captures 33% of inter-annual and 72% of decadal variations in instrumental SEA rainfall observations. We investigate the stability of regional SEA rainfall with large-scale circulation associated with El Niño–Southern Oscillation (ENSO) and the Inter-decadal Pacific Oscillation (IPO) over the past 206 years. We find evidence for a robust relationship with high SEA rainfall, ENSO and the IPO over the 1840–1988 period. These relationships break down in the late 18th–early 19th century, coinciding with a known period of equatorial Pacific Sea Surface Temperature (SST) cooling during one of the most severe periods of the Little Ice Age. In comparison to a markedly wetter late 18th/early 19th century containing 75% of sustained wet years, 70% of all reconstructed sustained dry years in SEA occur during the 20th century. In the context of the rainfall estimates introduced here, there is a 97.1% probability that the decadal rainfall anomaly recorded during the 1998–2008 ‘Big Dry’ is the worst experienced since the first European settlement of Australia.