Fremantle ditched plans for a fireworks display, believing it to be insensitive to Aboriginal people.
The move sparked fierce debate around the country, with the federal government initially arguing against it.
"Whilst it has been a little more brutal and polarising than we would have liked, the upside of the way we did it was it really did get people talking," Fremantle Mayor Brad Pettitt told SBS.
"And not just in Fremantle, but all around Australia," he said.
"I think over the last 12 months we've seen a diverse range of voices say 'let's rethink this, let's have a proper conversation about it and see if we can do it differently'. My sense is we can.
"Change won't happen overnight, but I think there is a mood for change."
Dr Pettitt said support from Aboriginal communities has been overwhelming.
Noongar man Robert Eggington from the Dumbartung Aboriginal Corporation said the decision by Fremantle served as an important catalyst for fresh discussions on changing the date of Australia Day.
"We need to as people to sit down and have the courage to discuss these issues and bring about some resolution to what is considered Australian and what isn't."
While the Fremantle business community has been keen not to politicise Australia Day, which it sees as an opportunity to get customers through the doors.
"It is very difficult for businesses to get caught up in the politics of it and that's not what we're about. We're about creating family fun and making a living basically," said Karl Bullers from the Fremantle Business Improvement District.
On the streets, opinion was split.
"I think it's up to individual places, depending on where you live. So we need to cater for everyone," said one Fremantle resident.
A local said: "Maybe next year more people will think about it."
Another said: "I'm indifferent, but the fact that I can be indifferent is what I'm celebrating today."
