NSW premier spruiks multiculturalism

Multiculturalism should be celebrated for all the benefits it has brought to Australia, says NSW Premier Mike Baird.

Speaking at an Australia Day lunch, Mr Baird highlighted the need for a welcoming and inclusive country adding he believed the country was at a fork in the road.

"We are potentially at risk of losing what makes Australia a great place to live because some want to shut our doors and avert our eyes," he told a packed room at Luna Park on Friday.

"It is our generous spirit that has always defined us as a nation, let us not lose it now when we need it most."

Mr Baird made the comments at the 32nd Australia Day lunch, ahead of next week's national day.

Events are taking place across NSW and in Sydney on Tuesday. About a million people are expected to pack the foreshore of the harbour to sing the national anthem at noon.