Australia today seems like a utopia of opportunity, tolerance and good intentions. Its greatest assets remain free to all comers: the space of the outback, the thrill of tropical forests, the endless beaches, the beauty of a stroll through Sydney Opera House and its foreshores. Our arts thrive, our catwalks buzz, our scientists win Nobel prizes. As a people we are still relatively laid back and unpretentious, thanks to an antiauthoritarian streak that arrived with the white settlers – mainly convicts – and is still part of our makeup.

On sunny days at Bondi beach cheerfulness abounds: toddlers delirious with buckets and spades, jocks tossing balls, Japanese tourists flinging off shoes, board riders slicing the foam. Our prime minister, Kevin Rudd, is highly educated, hardworking and smart, a bit of a goody-goody and no friend of edgy art. His government’s policies seem to have shielded Australia from the worst of the financial meltdown. Rudd speaks fluent Mandarin and never sleeps. When he flies to New York his first lunch date is with Rupert Murdoch, whose neocon tentacles grip the West by the balls. Our sole national newspaper, the Australian, a filtered version of Fox News, proclaims on the masthead that it’s “the heart of the nation,” though it reads like the soul of Murdoch. Israel can do no wrong, terror stalks our doorstep, refugees are poised to invade! Never mind that many are fleeing the wars we backed and that more will arrive as the sea levels rise.

Because of our small population, 22 million, Australians often feel the need to boast. We “punch above our weight,” our banks are the “best in the world,” we stand up for human rights, the impoverished, the underdog. Actually we stand up for the top dogs more often. We court billionaires, casino proprietors and Uncle Sam: rushing our troops to concocted wars in Iraq and Afghanistan, without a debate in Parliament or much of a fuss from the electorate. It was an Australian General who directed the 2004 pacification of Fallujah, though few here are aware of his role and the brutality of the assault.

Australians are easily distracted. The focus of mass media is shopping promotions and light entertainment: cooking, sport, gossip, stock shifts, celebrity trials, soft porn and big-ticket “must see” events. Forget about Fallujah, let’s “create the perfect falafel.”

Australia’s soft public image often conceals a heart of darkness. We even have secret trials. Australian citizen Mamdouh Habib is seeking compensation in the federal court for rendition, false imprisonment and multiple acts of torture. At the latest hearing Habib was expelled from the proceedings, along with his defence team, so those implicated in the affair could present evidence in secret. “My phones are tapped and my family tailed,” said Habib’s defence lawyer. “It’s like something out of The Bourne Conspiracy.”

While the surface mood of Australia is jolly and most bellies are full, not everyone thrives in this lucky country. The life expectancy of indigenous Australians is shockingly low. Despite a vocal grassroots movement working for the rights of asylum seekers, some have been falsely imprisoned and even sent back to their homelands, often with dire consequences. There are outbursts of racism, but less so than elsewhere. In the ’50s and ’60s it was aimed at the Italians and Greeks, now it is the Muslims who cop it. In shops, houses and cars, Australian flags have started to sprout like opium poppies in Afghanistan.

The mood of Australia in 2010? It’s bipolar: anxious on Monday, cheerful on Tuesday. Sometimes there’s a subliminal pounding in our ears, an echo of war drums, the dread of encountering something nasty in the woodshed, or maybe the coal shed. Thump, thump, thump. Why don’t we feel secure? We’ve had our snout up Uncle Sam’s bum for 65 years and we’re inching ever closer to Asia, so what is it that bugs us? After all, it’s not hard to make a quid. Stick a shovel in the ground and sell the rubble to China. Easy. Except our sunburned country is getting hotter by the minute: Agricultural lands are parched and forests can become infernos, demolishing entire communities. Our coral reefs are dying and the restless ocean undermines infrastructure – half a million addresses in Australia are less than four meters above the sea. Sure, we are busy planting, innovating, engineering, arguing, whistling a happy tune, but too many remain in denial. Adjustments are incremental, caution is king. We would rather be “early followers” than lead the pack. Okay, that’s the dark phase.

On the brighter side: We are adaptable, resilient and keen to help each other in times of crisis. As we start to roll up our sleeves and tackle the interlocking network of future threats, even sport – our dominant religion – may soon be relegated to a second-order diversion. In its own laconic way the mood of Australia in 2010 is transforming into one of determination, improvisation and all hands on deck. Oil drought? We’ll turn bush into fuel, ride bikes, start car pools. Water shortages? We’ll bathe with friends, desalinate, drink vodka. Food shortages? We’ll permaculture our backyards, create vertical gardens, eat lentils.

Cash once squandered for “must-have” baubles will be redirected to harnessing small-scale technologies and alternative energies, which will in turn nourish alternative modes of thinking. We are likely to witness more change in the next two decades than in the last hundred years. Young Australians are already seizing the moment; launching NGOs, blogs and websites to keep coal in the ground, politicians on their toes and voters informed. Today’s youth are funny and smart, hurling themselves into the knowledge revolution and putting the planet first. The mood on campus is different to my day – it’s less about sex, drugs and rock and roll, and more about safe sex, rescuing the future and hot rocks. To live on the brink of change is both scary and exciting. While tycoons and politicians grudgingly slouch toward a post-carbon civilization, a huge slab of citizens is way ahead of them: dreaming new dreams, the wind in their sails, ready for what lies ahead.

Richard Neville is an author and feral futurist based in Australia. richardneville.com