Why is Newcastle in New South Wales?
Seriously, though – when Oxley set out to find a location for a new penal colony in 1823, there was no point in looking where there was already such a colony, at Newcastle. England wished to establish a colony further north, and it was simply logical, eventually, to set the border for the state of Queensland closer to the colony of Moreton Bay, which became Brisbane. Brisbane is 789km from Newcastle, while Sydney is only 160km from Newcastle. It simply made more economical and political sense to keep Newcastle in New South Wales.