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It's the end of winter here in Sydney. The snow-ploughs have been churning up the Pacific Highway for days, the sand-gritters are out in force, rudimentary snowmen line the suburban gardens of Paddington, the cab drivers all wear mittens, tyre-chains are mandatory for anyone venturing off the motorway, and ... No, I'm afraid I can't keep this up. It is winter in Australia, but - much as you might wish them the kind of freeze-your- nuts-off winter that Britons fly to Oz in December to escape from - there's little sign of it. The sky is a kingfisher blue, long, ironed-out clouds line the horizon of Sydney Harbour purely (it seems) to produce more interesting sunsets, and everything sparkles like mad in the morning - the result, according to Thackeray, of keeping a section of ocean cooped up in a bay.

Bondi Beach is lined with industrial skips full of litter, though many of the cardboard boxes seem to be empty wine crates. A stiff breeze whips across the wide sand, to where two blonde babes in shimmery PVC are being filmed with a brace of doltish lifeguards for some vapid sitcom. At Surf's Up, one of umpteen T-shirt shops on Campbell Parade, the owner, Jim Nicholson, stands in front of a two-bar electric fire ("Christ, it's bloody freezin' in heah") and inveighs against the changing local population. "Bondi used to be full of heroin and losers. People didn't like to admit they lived here. Then Fox studios opened down the road, and the place was crawling with film producers and movie stars. Now it's full of glamorous hangers- on, and your roach-infested two-bedroom apartment's worth half a mill." He scratched his head at the oddness of social evolution. "Believe me, mate - it used to be heroin, now it's cocaine, only the addicts are prettier."

Everyone in town talks about food, and a week-long acquaintance with Oz cuisine leaves you flabbergasted. They devour eccentric, shy things, such as blue-eyed cod and "mud crab" and sardines - the last a bizarrely popular choice. Otherwise, the menu is ablaze with invention and eccentricity ("steamed kumquat pudding"?) The only odd thing is the ubiquity of the letters BYO at every restaurant entrance, suggesting you Bring Your Own wine, though nobody can explain why.

The locals are friendly, if insulting. In the first three days, I've been called a worry wart, a dag (it means, since you ask, something that dangles from a sheep's bottom), a ratbag and a suspect woofter, and that was just by the womenfolk. Attempts at gallantry are best avoided. I told one 6ft beauty that she should visit Italy some time, where her every venture out of doors would be greeted by cries of "Che stupenda figura". "If I knew what that meant," she said crossly, "I'd slap yer face ..."

I spent the weekend up the east coast at Byron Bay, the most spectacular sandy beach I have ever scampered down, into freezing shallows and deafening waves. Everyone tries, with foolhardy intrepidity, to surf on these Homeric funnels, these terrifying Hokusai curls, these tidal monstrosities, these gigantic crashing spirals pointing to a watery grave. The Beach Boys wouldn't stand an earthly. Only the bravest, the toughest Oz musclemen could possibly survive them. To beguile an idle afternoon, I watched the surf heroes arrive on the beach: the fat roadie with long black ringlets and fussy posing pouch; the three laughing blond lummoxes, complete with abbreviated surfboards (had they shrunk in the cold water, along with everything else?), the

deliciously thin Japanese girl in skin-tight rubber suit, then the scrawny hippies with henna-ed hair and huge boots and sickly expressions ...

Hang on a second. What are they doing here? These, gentle reader, are the "ferals" (as everyone calls them, to rhyme with "perils") and Byron Bay has become their natural habitat. In 1974, there was an epic Age Of Aquarius gathering in the region, and thousands of middle-class hippies trekked up from Adelaide, Melbourne and Sydney. Many have stayed ever since. They camp on the hillside. They pick up dole cheques from the DSS office in a converted Masonic lodge. In consequence, Byron Bay is now the centre of the Australian back-packing universe. The main street is foggy with patchouli. You can buy runes here (they take Visa or MasterCard), investigate "Aura-Chakra" readings or sign up for a course in didgeridoo sonic therapy. It's Glastonbury meets Eastbourne. Given the number of beach-culture addicts who flock to the place, you get some odd conjunctions: the "Crystal Temple" of aids to spiritual enlightenment is located next door to the "Mad Dog" surfie emporium.

In the evening, drinking at "the Rails", aka the Railway Hotel, a packed crowd of hairies, whale-fanciers, surfers, crystal-gazers and apparently unbothered middle-class locals watched a Levellers-style band playing whiny Celtic jigs. I asked the owner, Tom Mooney, a burly businessman who owns half the town, why he didn't mind their presence. "Nah, we love the ferals," he growled. "They're our guarantee the town won't turn into every other bloody town. It's the franchise outfits we dread. Any time some guy from, I dunno, Benetton comes near the town, we bung a couple of ferals in the main street and see how fast they change their minds ... So there we have it: the New Age Traveller as commercial scarecrow.

Under the stern gaze of Queen Victoria, whose imperiously sulky statue looms over Macquarie Street, an atavistic impulse drew me through the doors of Hyde Park Barracks. This small, three-storey prison was the first colonial nick to the convicts (deported from England and Ireland) who were otherwise roaming the streets of Sydney like prairie dogs. Today you look at the compact little building and think: 600 men, crammed in here. But what was the impulse that drew me inside? I prowled around the rooms, inspecting the sad lives of convict children, and the silken ironies of convict-ship logs ("Some of the women require more patience than falleth to the lot of sinful humanity," observed the Matron's diary on the good ship David McIvor in 1858). At the top, one room was filled with about 80 hammocks slung like bodies from wooden beams, inches apart. Next door was a roll-call from the 1828 census, which named all 600-odd men in the barracks and where they came from. I counted three John Walshes: a Dublin butcher (age 19, seven years for robbery), a Limerick farm labourer (age 24, seven years for insurrection) and a soldier from Kent (age 45, seven years for "breach of trust"). Appalled to find the family escutcheon so comprehensively besmirched, I lay down on one of the hammocks. There was barely room for a small child. The room's concealed loudspeakers whispered the details of who'd been sentenced to 25 lashes; who'd been given 50 ... I closed my eyes. A dozen family spooks came crowding in on my jet-lagged brain, flesh-torn, stunted and miserable. I was out of there like a bat out of hell.

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