The Academy Award-nominated star of The King's Speech and Pirates of the Caribbean was awarded a trophy outside Parliament House by Prime Minister Julia Gillard.
Rush told journalists on Wednesday (January 25): "This is a great honour for a performing artist in theatre and film. I feel sure that my colleagues will see this as an endorsement of our national story of creativity."
The actor revealed that he hoped to encourage Australians to enjoy cinema and theatre more, saying: "We live on an island that boasts the oldest nation on Earth. There is inspiration right there, where performance rituals are at the heart of its being - our dreaming.
"The stories we tell ourselves as adults and to our children, in the communal dark, have a serious importance."
Rush also revealed that he would be using the honour to "put an arts perspective" on world issues like gay marriage, asylum seekers and climate change.
"The one hat I don't want to wear immediately is the dunce's cap that says suddenly because I'm Australian of the Year, I have the licence to pontificate on everything and anything," he said.
"I'm sure an arts perspective on other current issues, whether it's climate change or gay marriage, there's a role for the arts to play in that."
Rush added that "every Australian" from "every background" loves "acting the goat, taking the Mickey, cracking a joke, spinning a yarn".
Last year, Rush was named 'Victorian of the Year' for his dedication to the Aussie performing arts scene.
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Watch Geoffrey Rush in the trailer for The King's Speech below: