The stories of the Dreaming tell of beginnings that are both specific and general. They narrate particular events that occurred in particular places, but those events are not fixed chronologically since they span the past and the present to carry an enduring meaning. By contrast, the story of the second settlement is known in minute particularity. It began with a voyage of eleven vessels that embarked with a cargo of 582 male prisoners, 193 females and fourteen children, the first of 681 ships that transported 163,000 convicts over eighty years. The First Fleet landed in Botany Bay in January 1788 then sailed to a cove of Port Jackson, now central Sydney. Here the British flag was hoisted as the commander, Captain Arthur Phillip, took formal possession of the new colony. We do not have the direct testimony of those Aborigines who dealt with the first European newcomers, and cannot recapture how they understood their usurpation. We can only infer how they interpreted the violation of sacred sites, destruction of habitat, the inroads of disease, and their growing realisation that the intruders meant to stay. This encounter could only be traumatic

After the chronic political instability that marked the conservative collapse and then the feverish pace of the truncated Whitlam regime, the ensuing years present an outward appearance of equilibrium. Between 1975 and 1991 there was just one change of government, and two prime ministers held office for roughly equal terms. Both in their own ways were striving for the security the electorate desired, and both held to the middle ground. Yet in the circumstances that now prevailed there could be no security without upsetting the ingrained habits of the past. One prime minister preferred confrontation and the other consensus as the way to bring change, but the changes were never sufficient. There was always a need to go further, to abandon yet another outmoded practice and make additional improvements. The first of the leaders was Malcolm Fraser, who headed a Liberal–National Country Party coalition from 1975 to 1983. In 1983 the voters rejected him for a new Labor leader, Bob Hawke. Both leaders searched for solutions. In the absence of older certainties, governments sought to restore national cohesion and purpose. Most of all, they tried to repair an economy that no longer provided reliable growth and regular employment.

The end of the war released a pent-up demand for goods and services that had long been unavailable, while the task converting a war economy back to peace conditions called for continuing restraint. In asking voters for patience during the 1946 election, Ben Chifley assured them of the benefits that would flow. ‘Australia was entering a golden age’, he said. With so many chafing at the shortage of housing and household goods, the opposition derided the prime minister’s claim, but he was vindicated. The third quarter of the twentieth century was an era of growth unmatched since the second half of the nineteenth century. The population almost doubled, the economy grew threefold. There were jobs for all who wanted them. People lived longer and better. They expended less effort to earn a living, had more money for discretionary expenditure, greater choice and increased leisure.

The long-running dispute among historians over the purpose of Britain’s new colony is beset by contradiction. If it was to serve as a naval base, why did the imperial authorities give strict instructions not to establish a shipyard? How could it function as a trading post when the East India Company had a monopoly on all trade in the Indian-Pacific? And if it was to appraise flax and timber, why did the First Fleet carry no botanist or gardener? Equally, the claim that Botany Bay was to be no more than a dumping ground for convicts overlooks the careful design of this new venture. It was to be a place of exile where convicts would work on the land under close supervision for the duration of their sentences and then on small plots of their own to meet their needs. The First Fleet thus marked the beginning of a new penal system in which the prospect of transportation to the other side of the world would deter crime and hard work would reform criminals, so that as peasant proprietors they would form the basis of a new society.

The Australian Settlement, then, was not a settlement. The reconstruction of the Australian colonies came in response to challenges that jolted established arrangements and assumptions. In their search for security the colonists adopted the forms of the race and nation, both artefacts of the modern condition of uncertainty and constant change. White Australia bound the country more tightly to Britain. At a time when the United States was taking in the huddled masses of Europe, and Canada accepted immigrants from east and south Europe, Australia restricted its intake to the old country. It was more monolingual by 1914 than ever before. With British stock as the basis of a new nation came the problems of dependence and economic vulnerability, the old quarrels over rank and religion, and further ones over class and gender. William Lane had sought to preserve the innocence of the New World with his New Australia, a forlorn endeavour. Alfred Deakin used New Protection to provide a measure of autonomy and harmony. But the New World remained tethered to the old and could not escape its effects.

Within a month of landing at Sydney, John Bigge was in dispute with Lachlan Macquarie over the appointment of the emancipist surgeon, William Redfern, to the magistracy. Over the next fifteen months of his inquiry the commissioner reached conclusions about the future of the Australian colonies sharply at odds with those of the governor. The two men were divided by background, temperament and expectations of empire. Macquarie, a career soldier, always viewed New South Wales as a ‘penitentiary or asylum on a grand scale’. It was destined to grow from a penal to a free society and ‘must one day or other be one of the greatest colonies belonging to the British Empire’, but that would depend upon the rehabilitation of its convicts under his tutelage.

‘The times will suit me’, John Howard proclaimed some months after he won the leadership of the Liberal Party in 1985. He was convinced that Labor’s attempt to reconstruct the economy through an agreement with trade unions was doomed to fail, and expected a mounting crisis of national solvency that would turn voters to a statesman prepared, like Reagan or Thatcher, to apply the same reforming vigour to the labour market. On regaining the Liberal leadership a decade later, Howard played on the hardship inflicted by the recent recession: ‘The Australian people cannot understand why they should have to suffer the indignity, the denial and disappointment of a bare five minutes of economic sunlight’. Over the past decade, as one prime minister after another has had to introduce herself or himself to counterparts at international gatherings, Australia has gained the reputation of ‘the coup capital of the democratic world’. Each change of leadership is dressed up in policy differences that fail to hide the personal nature of the rivalry and the fickle loyalties of parliamentarians who switch their support according to calculations of the best chance of electoral success.

In the space of thirty years the circumstances of Australian nationhood changed irrevocably. The country’s strategic dependence on Britain drew it into two wars that originated in European rivalry and together exhausted European supremacy. The first strained the political stability of the combatants and cut the flows of trade and investment that sustained their prosperity. The second destroyed their empires, leaving the continent in thrall to the two superpowers to its east and west. Britain, victorious in both wars, was perhaps the most diminished by their cumulative effects and its fading imperial certainties created doubt and division in Australia. Only as the second war spread to the Pacific, and Australia found itself isolated and in danger of invasion, came a belated recognition of the need to reconstruct the nation for changed circumstances.

At the end of 1850 Edward Hargraves returned to Sydney from a year on the other side of the Pacific. He was one of the ‘Forty-Niners’ who had converged on California in search of gold. Although unsuccessful in that quest, Hargraves was struck by the similarity between the gold country there and the transalpine slopes of his homeland. In the summer of 1851 he crossed the Blue Mountains to Bathurst and washed a deposit of sand and gravel from a waterhole to disclose a grain of gold in a tin dish. A revival of bushranging in the 1860s drew on the discontent of the rural poor, and the young men who joined Ned Kelly, the most legendary bushranger of them all, were sons of struggling or unsuccessful selectors. From 1877 England and Australia began playing regular cricket matches. The first Australian victory on English soil in 1882 gave birth to a mock obituary to England’s supremacy and thus the Ashes, which are the world’s oldest international sporting contest.

How and when did Australia begin? One version of the country’s origins – a version taught to generations of school children and set down in literature and art, memorials and anniversaries – would have it that Australian history commenced at the end of the eighteenth century. By the end of the twentieth century it was no longer possible to maintain the fiction of Australia as terra nullius, a land that until its settlement in 1788 lacked human habitation, law, government or history. The growing recognition of this vastly extended Australian history spoke to late-twentieth-century sensibility. It revealed social organisation, ecological practices, languages, art forms and spiritual beliefs of great antiquity and richness. The second version of Australian history, the one that begins not at 1788 in the Western calendar but 50,000 years or more before the present, is at once more controversial, more rapidly changing and more compelling.