This chapter examines Australia’s transition from a period of national mourning to a state of melancholia. The chapter explores how economic reforms, such as the Prices and Income Accord and neoliberal deregulation, led to financial instability and unemployment, fostering public anxiety and a sense of marginalisation. The High Court’s Mabo decision further intensified fears of displacement among certain demographics. Prime Minister Paul Keating‘s leadership, characterised by a progressive vision, failed to address the rising national anxiety, culminating in the 1996 election of John Howard. Howard’s emphasis on a ‘comfortable and relaxed’ national identity resonated with an electorate weary of introspection and change. His reluctance to engage with symbolic acts of reconciliation and acknowledgement of historical injustices signalled a shift from collective mourning to a denial of past wrongs. This period marked a retreat from public engagement with Australia’s colonial history, leading to a national melancholia characterised by denial and the privatisation of public spaces and services. The chapter argues that this shift had profound implications for Australia’s national identity and its approach to social equity and historical accountability.