We present a study of the clustering of galaxies in the local Universe (z < 0.4) using the SDSS and GAMA galaxy surveys. Using GAMA spectroscopic redshift we construct a large photometric redshift catalogue from the SDSS imaging data. We then measure the two-point angular correlation function as a function of photometric redshift, absolute magnitude and colour. For all our samples, we estimate the underlying redshift and absolute magnitude distributions using Monte-Carlo resampling. A linear relation between relative bias and L/L∗ is found to hold down to luminosities L ∼ 0.03L∗. We find that the redshift dependence of the bias of the L∗ population can be described by the passive evolution model of linear bias. We confirm an increase in clustering strength for sub-L∗ red galaxies compared with ∼ L∗ red galaxies at small scales in all redshift bins, whereas for the blue population the correlation length is almost independent of luminosity for ∼ L∗ galaxies and fainter. We proceed by studying the redshift space correlation function from GAMA as functions of luminosity and redshift. For L & L∗ galaxies we obtain an almost constant pairwise velocity dispersion σ12 ≈ 400 km s−1, whereas for L < L∗ galaxies the pairwise velocity dispersion increases as we go fainter. When measured in different redshift slices the pairwise velocity dispersion as a function of luminosity shows no signs of evolution, however it does present some scale dependence. Our measurements of the growth rate parameter are consistent with the standard ΛCDM+GR cosmological model.