The opening of Australia across Australia was quite an event. At local cinemas, there were premieres for Baz Luhrmann's film, with red carpets and audiences of A-list dignitaries from the area. Despite an undeserved mauling by the Australian critics, it still seems to be doing good business weeks later. In the town of Albury in New South Wales, where I caught up with it, there was a distinct sense that, for Australians, the film is considerably more than just another weepy epic. It demands a reaction.
The huffiness of Australia's critical class remains unabated. "I have never laughed so much in all my life," wrote Barry Dickens, a playwright and novelist, in Melbourne's The Age this weekend. "It is the best script in Australian shock therapy. Every moment is a breakthrough in horse or cow manure." Australia was "our stupidity made vaudeville and our history slapstick."
This moment of cinematic shock therapy is well timed. The election of Kevin Rudd's Labor Party just over a year ago ended a sustained period of the robust, unimaginative conservatism of John Howard. Now in power, the centre-left government of Australia is following modern tradition by advancing policies which, if they had been suggested by the previous regime, would have caused howls of outrage.
Last week, it proposed that funding for aboriginal schools should be tied to levels of literacy. It has also promised to pressure local indigenous administrations to break up collective housing into individual leaseholdings so that aboriginal families would have more of a personal stake in society. Two years ago, these proposals would have been condemned as meddlesome assaults on the sacred communal culture of Australia's indigenous population; now there has been not a murmur of protest.
Another controversial favourite, republicanism, has also resurfaced. A senior Labor politician, Mark Dreyfus, is arguing that his government should hold a referendum to decide whether the Queen should remain head of state. Previous proposals have been defeated, but there is a different mood about Australia under Rudd, and the moment may have arrived when the country is ready to take this symbolic step towards independence.
Australians spend a lot of time debating their national identity, and it is that unresolved history, caught between the opposing myths of the country's colonial and aboriginal past, which propels the wonderful hokum that is Australia.
The film does its best to play it safe. The baddies are colonialists – snotty, uptight and venal – and the goodies, who find themselves on the same side, are rough, tough Aussies and victimised, spiritually exalted aboriginals, represented by a beautiful 12-year-old boy and his grandfather, a "magic man" who lurks meaningfully about the place and is cruelly treated before coming through in true Hollywood style.
The film-makers faced a tricky plot dilemma at the end of the film. Does the aboriginal boy adopted by Nicole Kidman and Hugh Jackman stay with his white guardians, thereby satisfying audiences but representing a now-unacceptable model of assimilation, or follow his grandfather and his culture?
Unsurprisingly, it is the uncontroversial route which the film follows: the boy throws off his shoes and wanders off into the hazy, mysterious outback. In the real version of Australia, tougher decisions about integration and independence lie ahead.