"Our world has grown weary of greed, exploitation and division, of the tedium of false idols and piecemeal responses, and the pain of false promises," he told the crowd.
There were numerous signs something was amiss in modern society, the pontiff said.
He highlighted drug and alcohol abuse as examples of modern woes, and hit out at television and the internet for promoting sex and violence as entertainment.
"I ask myself, could anyone standing face to face with people who actually do suffer violence and sexual exploitation explain that these tragedies, portrayed in virtual form, are considered merely entertainment?" he said.
The 81-year-old pontiff also called for greater protection of the environment for future generations.
He spoke of "scars which mark the surface of our earth - erosion, deforestation, the squandering of the world's mineral and ocean resources in order to fuel an insatiable consumption".
Abuse row
Later today the Pope will travel by car through the streets of Sydney.
It is the headlines that arouse anger rather than amusement that are impossible to ignore
He will stay in Australia until Sunday, when he is to preside over an open-air Mass at Sydney's Randwick Racecourse before hundreds of thousands of pilgrims.
During the course of the visit - his ninth outside Italy - he is also expected to apologise for decades of sexual abuse of children by priests.
Rows over alleged cover-ups of abuse overshadowed the run-up to his visit.
Speaking to local radio early on Thursday, Prime Minister Kevin Rudd said that abuse by the clergy had caused enormous damage to victims and their families, and called on the Church to respond to each individual case.
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