Australia seems caught between the populist disaffection sweeping Western countries and the innate optimism of its people – which will win? In the meantime, those touchstones and preoccupations of modern Australian life – the relationship between Indigenous and non-Indigenous Australians, the economy, the future of multicultural Australia – all still hold centre stage. If only the country's politicians could get their act together...

Indigenous Australians

Australia's treatment of Indigenous Australians has come a long way since the days of terra nullius – the legal fiction that declared Australia devoid of human settlement and which the British empire used to prop up its colonisation – and needing a referendum to grant the most basic citizenship rights to its first inhabitants. Indigenous owners now own roughly half of the Northern Territory's land, for example, and many Aboriginal communities have negotiated lucrative royalty deals with mining companies working on traditional lands. But many (though by no means all) Aboriginal communities remain in crisis – poorly governed and beset with problems of alcohol, petrol-sniffing, high crime levels and the concomitant high levels of incarceration. But the correct balance between self-determination and government intervention is one that no one in Australian policy circles has ever quite worked out.

In the meantime, there have been moves towards greater legal recognition: in 2017 both Victoria and South Australia began formal treaty negotiations with local Indigenous communities, and there appears to be bipartisan support for a formal referendum seeking constitutional recognition of Indigenous Australians as Australia's first people. But with Indigenous Australians suffering disproportionately when compared to non-Indigenous Australians – from life expectancy and key health indicators to unemployment and economic disadvantage – there remains a long way to go.

The Rise of Populism?

With the world still reeling from the rise of the UK's Brexit referendum and the election of US President Donald Trump, many Australians are wondering what their political future holds. Australia's prosperity and racial and religious harmony have mostly given little cause for concern, and there are appear to be no obviously Trump-like candidates with nationwide appeal ready and able to take up the mantle of populist anger.

But there are signs that disaffection with mainstream politics is growing. Independents are an increasingly powerful force in Australian politics. Pauline Hanson, last seen in 1998 when she lost her seat in Federal Parliament, has returned to the fore, calling for a cap on immigration from Muslim countries and even a Royal Commission into Islam. Other names advocating a similar line include Tasmanian independent senator Jacqui Lambie and South Australian senator Cory Bernardi, who in early 2017 left the Liberal Party to form his own party, the Australian Conservatives. In the absence of an economic downturn, such views remain on the fringe (albeit with a vocal presence in parliament) and have yet to penetrate the mainstream. They are, however, increasingly a feature of the national conversation.

Revolving-Door Politics

If Australia's politicians are to hold back the tide of populist politics sweeping Western democracies, they'll need to get their act together. After decades of stable governments and democratic transitions of power, the two major parties – the centre-left Australian Labor Party (ALP) and the centre-right Coalition of the Liberal and National Parties – have resorted to infighting and the politics of the revolving door. In 2010, Labor deputy Julia Gillard overthrew the sitting prime minister, Kevin Rudd, and the Labor Government never quite recovered; Rudd even returned the favour one last time, unseating Gillard in 2013 only to remain in power for just three months. After the Coalition won power in elections later that year, they clearly hadn't learned their lesson from their opposition's mistake: in 2015, Malcolm Turnbull pulled a Gillard and unseated Prime Minister Tony Abbott.

Like Gillard, Turnbull barely survived the next election; at the time of writing, his government relies on the flimsiest majority to rule and appears to be fatally wounded. In the meantime, important issues such as economic reform, constitutional recognition for Indigenous Australians, same-sex marriage equality and the question of whether Australia should become a republic remain on the back burner for a government paralysed by fighting within its own ranks.

Economy & Environment

Australia's economy continues its remarkable story of prosperity. Having weathered the GFC with barely a blip, the country continues to enjoy low unemployment, low inflation and generally high wages – though the cost of living has soared to levels that threaten to leave behind a generation of would-be home-owners and the days of the great mining boom are definitely over. But for now at least, the economy is forging onwards and upwards, thankfully paying little heed to the shenanigans of its political leaders from both sides of Parliament.

Economists have, however, warned that dark storm clouds could be gathering unless governments undertake meaningful economic reform. At the same time, environmentalists worry that the Australian government will continue to keep environmental protection as a low policy priority, from new coal mines in Queensland and policies that environmentalists argue pose serious threats to the Great Barrier Reef – the government even picked a fight on this with Ellen DeGeneres – to the dismantling of the country's carbon tax.