A record crowd of up to 1.5 million people watched a huge, multi-million dollar fireworks display centered around Sydney's iconic Harbour Bridge.

Not to be outdone, New Zealand staged a pyrotechnics display from Auckland's Sky Tower.

Kiritimati, or Christmas Island, in the Pacific Ocean became the first inhabited place on Earth to celebrate the new year at 1000 GMT.

Organisers of the Sydney festivities - the biggest New Year event the city has yet staged - said they were hoping it would offer revellers a brief respite from the economic gloom of 2008.

"There's so much misery around," fireworks director Fortunato Foti told reporters.

"If we can get people to forget all that and think just about the fireworks for 15 to 20 minutes, we will have done our job."