For a few months now waking up while being surrounded by smoke has been an issue. However, the cause of the persistant smog is of the greatest concern.
At present, Sydney is under threat of being completely surrounded by fire, cutting off major roads and further choking the city with thick smoke. With estimates that there could be a combined fire front up between 400,000 and 500,000 hectares of burnt land. The equivalent of 1/4 of Brittan being on fire, in estimate. With the total area already lost to other fires being greater than some European countries.
The next week has been declared a state emergency, and the festive season is now overshadowed by the fires. Most people are resigned to the out of control nature of these events. Others simply stating that there can't be much left to burn. However, the situation from the fire-fighters perspective is to simply do their best.
Below: a prediction of the worst case scenario by a local newspaper.