A minor incident, but it highlights one of the persistent paradoxes of modern Australian art and its international reception. Successful exhibitions of Australians abroad are the exceptions that prove the rule. The rule is that Australian art looks indifferent when shown overseas, and is treated accordingly.

Yet when informed Europeans or Americans, professional or lay, come to Australia they are astonished at the quality and range of Australian art. An American trustee snapped only half-jokingly at me when visiting Melbourne: ‘Why hadn’t we heard of these good Australian artists and why hadn’t we been buying them for the Atheneum?’ (The truth was, I had. Substantial paintings by Sidney Nolan, Jan Senbergs, Robert Jacks, Emily Kngwarreye, and Gloria Petyarre all entered the collection, joining a fine mid-1950s Boyd landscape.)

The paradox remains: why is Australian art such a success on native grounds and such a comparative failure in foreign fields?

We need to qualify the last statement. Fifty years ago, Recent Australian Painting,an exhibition curated by Bryan Robertson, then director of the Whitechapel Art Gallery, had a galvanic effect on the stocks of Australian artists in London. Even Bernard Smith cautiously suggested that ‘it may well come to constitute … something of a landmark in the history of our painting. For the first time Australian art found a large receptive audience outside its own country.’ London had been softened up during the previous decade. From Russell Drysdale’s first exhibition at the Leicester Gallery in 1950 – the first of four such shows over the next twenty-two years – to Nolan’s brilliant survey exhibition at the Whitechapel in 1957 and Albert Tucker’s one-man shows at Waddington’s, a microclimate favourable to things Australian had formed. The emergence of Patrick White from the shadows, with The Tree of Man (1955) and Voss (1957), published by the eminent London literary firm of Eyre and Spottiswoode, and the success in 1957 of Ray Lawler’s Summer of the Seventeenth Doll in London, added to the antipodean groundswell.

No subsequent exhibition has ever had the same impact. Exhibitions such as Antipodean Currents: 10 Contemporary Artists from Australia,shown at the Guggenheim’s SoHo branch, now defunct, in 1995, gathered the usual suspects of the decade – Mike Parr, Imants Tillers, Gordon Bennett, Tracey Moffatt, Tim Johnson – and they looked like everybody else showing in SoHo: no better, no worse. Rather grander claims for the international recognition of contemporary Aboriginal art circulate in Australia today than experience bears out. There were two major international exhibitions of Aboriginal art, both of them serious and spectacular: Dreamings: The Art of Aboriginal Australians,curated by Andrew Pekarik for the Asia Society in New York, in 1988; and Aratjara: The Art of the First Australians,curated by the Swiss artist Bernhard Lüthi, shown at the Kunstsammlung in Düsseldorf in an enormous room, and proving quite overwhelming. Warmly received in Germany, the show received this ludicrous verdict in the Independent when it moved to London: ‘The art represented in Aratjara is perhaps the most boring art in the world.’

Dreamings certainly left its mark on New York at the time, but you would be hard put to find much contemporary Aboriginal art on display in European or American art museums. If you battle your way through the stygian gloom of the Musée du quai Branly, in Paris, you will find some minor and inexpensive examples in a back corner. The Hood Museum at Dartmouth College, now directed by Brian Kennedy, sometime director of the National Gallery of Australia, has, however, announced the gift of the Owens and Wagner collection of contemporary Aboriginal art, to go on view in 2012.

Of course, there have been exhibitions by individual artists in prominent venues overseas that stirred public attention. Nolan’s first Ned Kelly series attracted both critical attention and a substantial attendance when shown at the Metropolitan in New York, in 1994. Fred Williams: An Australian Vision – despite the plodding title – evoked a similar response at the British Museum in 2003, and led to the Tate’s acquisition of seven important paintings. Tracey Moffatt, Peter Booth, Bill Henson, and Ricky Swallow have all had well-received exhibitions in New York within recent memory. Yet such individual shows fall short of the collective effect of the Whitechapel exhibition, let alone the impact Australian art has on its own home ground.

So what exactly does the curious traveller to the antipodes encounter? Earlier this year, I saw the Australian collections on display at the National Gallery of Australia, the Art Gallery of New South Wales, and the National Gallery of Victoria within the space of four days. Each has its strengths, but not one of them tells the story of Australian art comprehensively, even allowing for the inevitable lacunae in any museum collection.

In Canberra, the new galleries devoted to contemporary Aboriginal art rather sideswipe the Australian collection. Even if the proportions and spaces of those galleries maintain Andrew Andersons’s reputation for architectural anonymity and conventional taste, their spit-new quality makes the old Australian galleries look dowdier, more cramped, than ever. Once one gets past the curatorial pieties of colonial portraiture, still life, and genre, Eugene von Guérard emerges as the true hero of the mid-nineteenth century – due in some measure to Daniel Thomas’s foundational influence on the collection – with substantive, if unsurprising, support from John Glover and Conrad Martens. The underlying drama of the wild and the settled, with its effect on Indigenous people, emerges clearly.

The NGA stumbles when it comes to the Heidelberg School. Consigned for the most part to airless and claustrophobic rooms, the visitor must work hard to sense the quality and the decisive change they wrought in the temperament of Australian art. Eventually, Conder’s intimate Heidelberg interior,Impressionists’ camp, Streeton’s awkward and admirable From McMahon’s Point – fare one penny, Roberts’s unsurpassed Allegro con brio: Bourke Street west, and some moody late McCubbins break through the constipated setting. One can see why Americans read and admire these pictures so enthusiastically, for they parallel the nativist strand in American Impressionism rarely seen outside of America – Childe Hassam, John Twachtman, and William Merritt Chase.

Interestingly, the NGV’s nineteenth-century galleries at the Ian Potter Centre in Federation Square – that over-lambasted building – make for a more fluent reading, from colonial art to the personal stirrings and national enterprise of the Australian impressionists. Louis Buvelot looks his best by far in Melbourne and acts as a plausible fulcrum between the studio-bound colonials and the plein-air Heidelbergers. But put a full stride between yourself and the end of the nineteenth century at the NGV and you slide into chaos.

The NGV shot itself in the foot at the outset by not specifying a separate temporary exhibitions gallery at Federation Square, as MoMA did with its major Tani-guchi makeover. The coherence of the collection takes a huge hit when galleries are given up to incoming shows. The state government shot the NGV in the other foot by compelling it to accept the Joseph Brown Collection on the absurd and outrageous terms that it has to be displayed as a unit in perpetuity. It is an open scandal that a private collector can usurp a public space for personal grandiloquence. With no more than a baker’s dozen of outstanding works in the Joseph Brown collection, it is rampant with the minor and the mediocre. As a result, far more important works in the permanent collection are consigned to long-term stays in storage.

The twentieth century should be the triumph of the NGA’s collection. They have three key sets of paintings: Nolan’s Ned Kelly series (1946–47), the bulk of Albert Tucker’s Images of modern evil, and the Arthur Boyd gift of more than three hundred works from his studio. Of these, only the Ned Kelly paintings receive appropriate and permanent installation on the ground floor, the piano nobileof the NGA. When I saw the collection, a group of Boyd’s 1970–73 paintings on the theme of the artist as outcast – those images of a painter caged or chained in a white hot desert – were imaginatively hung adjacent to the Kellys and provided a perfect foil to Nolan’s buoyant violence. Disappointingly, upstairs with the rest of the Australian collection, Tucker’s Images and Boyd’s early work get mixed up, fatally, in the Agapitos/Wilson Collection of Australian surrealism, to which they only tangentially belong. The 1940s, properly recognised now as the most significant decade in Australian twentieth-century art, mark the moment when the tragic sense, bringing with it a radical pessimism, changed the face of the national school. The Agapitos/Wilson Collection muddies the waters and gives the misleading impression that Australian art in the 1940s was a provincial offshoot of European surrealism. Of course, surrealist practice influenced, even licensed, advanced practice in Australian art, but what made the painters of the 1940s such exceptional figures was their transformation of the Australian environment, be it landscape or cityscape. In so doing, they altered the Australian temper and changed Australian identity. It was their engagement with the world that mattered.

Surprisingly, given the refreshingly iconoclastic quality of its collecting in non-Australian art, the Australian collection at the AGNSW is the most canonical. It has never worried much about its nineteenth-century representation, and maybe it doesn’t have to with such prescient works as Departure of the Orient – Circular Quay, Fire’s on,and Bailed up. Our curious international traveller must discover them for herself amid the welter of nineteenth-century British and European paintings, and decide for herself how remarkable they are; how far they turn from, or accommodate themselves to, Victorian painting.

The twentieth-century galleries could hardly be more different. They toe the line from Grace Cossington Smith and Roland Wakelin to Brett Whiteley and the later Jeffrey Smart – the goalposts of the canon. Only some contemporary Aboriginal painting breaks the spell. But they are among the most cohesive and satisfying galleries of Australian art ever formulated. You have a continuous, unfolding sense of the expressive life of the nation. The Nolan room, ranging over forty years of his art, is quite the best installation and representation of this artist in any museum. Arthur Boyd (along with many other artists) looks better in Sydney than anywhere else, with a greater diversity in his representation and a more acute focus on securing major works.

There is more to the Sydney collection than simply having the right works well installed. The collection feels as though it has been ‘curated from within’. The connection between individual artists and works reflects an understanding and empathy less apparent in other Australian collections. John Passmore is a case in point. Surrounding the central work, The miraculous draught of fishes,are a series of crisp and painterly studies of figures on a quay, fishing or lounging. They have the liveliness of oil sketches and the satisfactions of the fully realised work. In The miraculous draught, their sense of abundant life risesto a different level of emotional intensity – a moment of revelation akin to the experience of Patrick White’s visionaries and mystics – as the disciples bend in the darkness to grapple with their over-burdened nets.

Small wonder that visitors who start their antipodean hegira in Sydney believe that they have stumbled upon some of the most remarkable, undiscovered art of their time.