In 1900, the three richest countries in the world were Australia, New Zealand and Argentina. Two constitutional monarchies and one republic. Guess which one is the 21st century basket-case. Why didn't Australia follow Argentina down the road to serfdom? Was it just our British institutions, or is there more to it than that? I would suggest that Australia was, from its earliest days, founded by people intent on recreating Britain, but shedding some of Britain's more obnoxious mannerisms. And it was a colony dedicated, as many have noted, to the Fair Go.

What exactly does this mean? It means not going the whole hog. It means everybody gets a stake in society. No serfs for us, thanks. It means one colour-blind law for everybody. And it means (take note, Mr Howard) trade unions. [Gasp!] Unions may well be in decline, but the only two PMs in our history to lose their seat have both done so after enacting anti-union legislation. Australians knew perfectly well in the 80s that we had to have economic reform, and that it would be painful. This probably came easier from a Labor government, but consider: the UK had Arthur Scargill. We had Bill Kelty. But when the final wave of reform came, Australians said No! We believe you that the country will be richer overall if we choose the US model. But what's the point if most of us get poorer? No thank you, Prime Minister.

Are you ashamed of once having been a penal colony? I'm not. Everyone's gotta start somewhere. But once you get past the appalling cruelties of the penal system in those days (and frankly, it really was just par for the course in worldwide criminology) the most striking aspect of our earliest white settlement is the freedom granted to ticket-of-leave men and women. OK, so we're going to be monstrously cruel to you. Are you really sorry now? Fine. Now get out there and build a nation. And have a few thousand acres while you're at it. And don't bother with the forelock-tugging because we don't do that here.

The first serious challenge to authority in Australia was the Rum Rebellion, where settlers and soldiers overthrew the government. The British response was to send Lachlan Macquarie to end the revolt. However, settler grievances were (possibly) seen to be addressed because Macarthur was allowed to explain away with his part in the revolt, while his wife went on to found the wool industry. Macquarie also changed the dynamic of the early colony by giving ex-convicts a bigger stake in society.

This revolt of xenophobic tax-evaders was brilliantly dealt with as follows. They put down the revolt with a regiment from Melbourne. It seems clear enough that the rebels didn't expect this, but the government could hardly tolerate armed revolt. The license fee grievance (caused by the Governor's ineptitude) was dealt with by shifting the tax elsewhere. The ensuing treason trials were in my view a piece of consummate political strategy. Sir Redmond Barry, presiding, seems to have had an attack of interest rei publicae ut sit finis litium. His direction to the jury was that, if found guilty, the rebels were to be hung, drawn and quartered. Understandably, all were acquitted. Barry obviously wanted the whole issue to go away, and he got what he wanted, without much lingering resentment.

There is also the ugly face of xenophobia to consider. At Lambing Flat, Chinese were wantonly massacred. The government response was to change the town's name to Young, on the grounds that this is Australia and we don't do this here. We don't want to look at maps and see place-names stained by complicity with murder. Near Castlemaine, there was another attempt to kill the Chinese, foiled by the awesome majesty of the law in the form of Constable Thomas Cooke, who faced down the would-be murderers single-handed. After that, the message seems to have got through.

The Irish in Australia were potentially a far bigger threat than either corrupt soldiers, tax evaders or settlers. Many writers have commented on the singular fact that the law and the police force were Irish-dominated. What better way of ensuring the loyalty of potential rebels? The attempted assassination of the Duke of Edinburgh produced a tidal wave of loyalty and the Prince Alfred hospital. What is also clear is that Fenianism never recovered, give or take a Kelly or two. Interestingly, the clergy were told on both sides to stay out of it. Penal Laws? Forget it. We aren't interested.

Later, Daniel Mannix was given what might have seemed at the time an extraordinary license to promote Catholicism against the Anglican establishment. It is my belief that the establishment took Mannix' measure, and decided that while he was intending to push hard, he was also an adherent of the philosophy of Thus Far But No Further. One also thinks, in connection with Mannix, of John Wren. While he was undoubtedly a crook, the government seems to have decided that he wasn't Squizzy Taylor, but a pro-British patriot. Brilliant politics on Wren's part, but also from Mannix. It was as if Mannix was telling the government: don't you worry about John. I'll keep him in line.

OK, so this didn't go so well. How could it? There has never been an instance in human history where indigenous tribes have not been pushed aside by more technologically-advanced invaders. I have heard many tedious debates in the culture wars lately and I would say only this. I don't want to play. One point advanced by the no-black-armband brigade is worth repeating, however. It is quite simply a lie to say that we were settled by genocidal invaders. The ruling class who settled Australia were men and women of the ilk of William Wilberforce (as seen in the movie Amazing Grace).

It didn't work out the way they wanted because it never does. If we settle for a compromise along the lines of (a) no black armbands (b) no living in denial either and (c) can we please fix this? then that would be very much in line with real Australian values, as distinct from political slogans. At all events, I cannot for the life of me see how a republic is going to put a single dinner on Aboriginal tables.

Britain having learned from its American mistakes, Australia had no urgent war-cry to unite it. The Constitution we got was a cobbled-together ragbag: part Washington, part Westminster, part let's make it up as we go along. The view seemed to be that we will do whatever we have to in order to stop WA seceding. At least that worked, so far. And a constitution based on compromise is really rather fitting for a nation based on compromise, wouldn't you say? So don't mess with it. Leave it alone, with one exception. Please can we delete Mr Howard's waffling preamble and replace it with John Clarke's inimitable suggestion?

"G'day! This is our Constitution."

Intriguingly, the PM-elect has promised to reintroduce the Westminster System to Australia. Anyone who wishes this country well should back him all the way on this, because one extremely black mark against the Howard government is the undeniable fact that he, like most of his recent predecessors, absolutely trashed the doctrine of Ministerial Responsibility. The USA has strict separation of powers. We have some of that, but under the Westminster System the buck is supposed to stop with Ministers. For a viable democracy you must have one or the other. Go, Mr Rudd!

All right, then. For the Anglophobes among us, what exactly do we inherit from Britain that we should want to hang onto it? How's this for openers?

The English language. A small, all but unnoticed tribe of German buccaneers settled in the British isles in the 5th century. They experienced a number of vicissitudes over the ensuing centuries and responded to this by borrowing words wholesale from their invaders, including the Vikings and the bloody Normans. Later, getting seriously into their stride, they decided to take on board Latin, Greek, and (growing in confidence) anything which seemed like a good idea at the time. Anglophones have hung out our sign above the shop which says: we are not proud. We will borrow from anybody if it's a good thing. If you are reading this in English, then you are paying tribute to our Anglo-Saxon ancestors. And if you aren't happy with this, go and learn Esperanto. But don't expect us to follow you there.

The Law. Law is a Viking word. Previously we talked a lot about riht (justice) and especially unriht (injustice) about which we got very hot under the collar. Then a teenage adventurer called Henry of Anjou took over and said OK you want your ancient laws? Fine, you got them. And by the way, nobody is above the law, especially not me, and I really mean this. Then an over-conscientious younger brother called Richard got the throne and lost it again through treachery, but not before he got us bail. They tried Renaissance tyranny but decided they'd only put up with it if the monarch was seriously bright and good (eg Elizabeth I and Charles II), but they really wouldn't wear it from anybody else.

Being Nice. Britain saw off a boxed quadrella of European dictators (Phillip II, Louis XIV, Napoleon and Hitler) because they decided that they loved their freedom and they weren't going to allow these pox-ridden creeps to turn Europe into one vast concentration camp, because other people might want to taste liberty as well. And they did it, and forgave their enemies afterwards. Is this so bad? And is it their fault that Prince Metternich sabotaged Lord Castlereagh's prescription for Formation Niceness at the Congress of Vienna? Well, no, not really. It would have been much better for the effete aristocracies of Europe if they'd listened to Castlereagh, but Britain isn't in the business of forcing people to obey their wishes, most of the time.

And if anybody is wondering why we still have that little Union Jack in the top left-hand corner of our flag: wonder no longer, because that's why.

David Greagg