Director of Brisbane's Gallery of Modern Art, Tony Ellwood. It was when Brisbane's corrupt cops and even more corrupt bagmen politicians ruled the frontier town of XXXX beer and barbecued ribs. By night, they tore down its elegant heritage buildings and by day they rooted out the left-wingers cooking up subversive pop music in their Fortitude Valley burrows. Noel Staunton, recently appointed artistic director of the Brisbane Festival, remembers waking in fright in Brisbane in 1987 fresh from his native England. "I was visiting with the Australian Opera and on opening night, a woman turned up wearing a fur coat and thongs! I thought, 'Where have I landed?'," Staunton says, recalling that the cast and crew had been warned by the company manager to be careful what they wore on Brisbane's streets. "The irony was the chief electrician — the butchest, straightest rooter in the company — got beaten up because they thought he looked camp!" he says as he sips a crisp sauvignon blanc on the elegant deck of one of GOMA's many riverside cafes. "Brisbane now," says Staunton of the city of 1.8 million, "has found its confidence. It no longer looks over its shoulder at Sydney or Melbourne but says: 'We know who we are.' "

Brisbane's Gallery of Modern Arts - one of the largest galleries in the world. The southerners' view of Brisbane as the home of white-shoed rednecks with gold medallions around their necks and chips on their shoulders is a myth, says Ellwood. "Brisbane people are subtle," he says. "They don't want to be a version of Melbourne or Sydney, but take the best of what they see and reshape it." Premier Anna Bligh speaks at the recent launch of the exhibition Valentino, Retrospective: Past/Present/Future at GoMA. Talk to the city's other cultural commissars, strategists and marketing gurus, who appear as numerous as the cranes and excavators digging tunnels and bridges for the bigger, newer, ever more ambitious Brisbane and the encroaching Gold Coast "corridor", and the common refrain seems to be: "Well, how did we get here?"

"It's not that long ago that the idea of spending a weekend in Brisbane to see an international ballet would not have occurred to anybody," says Queensland Premier and Arts Minister Anna Bligh of the unexpected success of a sold-out season of the Paris Opera Ballet in 2009, which attracted 25,000 people, with 15 per cent coming from interstate. Brisbane people ... don't want to be a version of Melbourne or Sydney, John O'Sullivan, the chief executive of Queensland Events, which gave $500,000 to the ballet's producers to take it north when the Victorian Major Events Company rejected the show, seems similarly startled by the changes. "When I left Brisbane in 1994 [for London and Sydney], I would never have imagined Brisbane would be hosting a Valentino blockbuster or the Cuban Ballet [at last month's Brisbane Festival] with such success," he says, explaining that he is one of the growing senior professional class who are returning home for plum jobs and "lifestyle" reasons. Ellwood, who abandoned a fast-track career in the self-proclaimed cultural capital of Melbourne to run the Queensland Art Gallery and the new $100 million, astonishingly successful GOMA in a vibrant expanded arts precinct, has an unbridled enthusiasm for his new job.

"You go to work every day feeling you are making a difference," he says of GOMA, which is one of the world's 10 largest galleries dedicated solely to showing and collecting contemporary art, and whose commanding presence on the Brisbane River makes Sydney and Melbourne's version of contemporary art centres look, well, regional. And of Brisbane, Ellwood says: "There's a sense of continual improvement and optimism in every aspect of life. This is the land of hope," he continues, without a hint of Melburnian irony. OK, OK, we get it, but has the genial, softly spoken, Bendigo-raised gallery director been drinking the Sunshine State Kool-Aid? Brisbane, like almost every other Western city in the world, has discovered the advantages of "lifestyle" and urban "renewal" promoted by demographers and writers, including Richard Florida in his 2002 The Rise of the Creative Class. But Brisbane seems to have taken to it with a gusto that Bligh says is consistent with its can-do, "frontier" approach. "There has always been an entrepreneurial zeal about Queensland. Once it was about the 'rocks and crops' but now you can see it in the arts," she says.

Brisbane's metamorphosis from a derided cultural backwater began in the mid '70s with the Bjelke-Petersen government-funded Queensland Performing Arts Centre, and its "events culture" grew with the 1982 Commonwealth Games and 1988 Expo. Successive Labor governments since 1989 and the Brisbane City Council (the largest municipality in Australia) have invested in infrastructure, including the $40 million renovation of QPAC, the establishment of the multi-arts venue, the Brisbane Powerhouse, the annual rock industry event, Big Sound, the Queensland Music Festival, and the Brisbane Festival. The revamped $300 million South Bank, including its shiny new State Library of Queensland, was finished in 2008, and GOMA opened in 2006. The gallery is an effortlessly beautiful, user-friendly building, and its extraordinarily successful program of contemporary shows has made the building, by Architectus, a beacon and a representative of the city's cultural ambitions. So much so that its success has given city the confidence for the Premier to proclaim: "We have a very clear ambition for Brisbane to be the cultural capital of Australia." She tells The Age: "The sky's the limit." Yes, we're used to interstate rivalries and the crowing by state premiers that theirs is the best, biggest and "world class", but no one in the arts is doubting that Brisbane is serious about the arts and is being led by a Premier whose passion for the arts has won her admiration bordering on adoration from senior arts figures.

"When I talk to Anna Bligh, it's like talking to another arts administrator — she has such a depth of understanding and interest in what we do," says Ellwood, and his comments are echoed by former Brisbane Festival director Lyndon Terracini (now artistic director of Opera Australia), and the Queensland Music Festival director, Melbourne-based Deborah Conway. Bligh's interest in the arts is backed up by some figures that show the Brisbane-based Queensland Theatre Company as the most highly subsidised performing arts company in the country. The $4 million it gets from both state and federal governments pays for 50 per cent of its annual operations, while the Queensland Art Gallery and GOMA combined receive $31.1 million a year from the state government, providing 75 per cent of annual costs. Since 2006, these two galleries have recorded an astonishing 400 per cent increase in visits — from 350,000 to 1.4 million this year. The Queensland Art Gallery's Asia Pacific Triennial of Contemporary Art, which began in 1993 under former QAG director Doug Hall — whom Bligh credits as a cultural visionary who helped reshape Brisbane — attracted 500,000 visitors to its three-month exhibition last year, a quarter of them coming from interstate. This year, Bligh says, a Ron Mueck sculpture show at GOMA "got 70,000 more than they did in Victoria", where it attracted 118,464 people at the National Gallery of Victoria. Should the NGV be worried by that? "I hope so!" the Premier laughs. Do as Premier Bligh suggests and wander around the South Bank cultural precinct on a sunny weekend and you will indeed find parents, kids and 20-somethings lounging on the grass and downloading material from the State Library's free Wi-Fi. "There's a buzz," says Bligh, "It's like being on a university campus."

She says much of the "youthful energy" in Brisbane comes from the fact that "the people who used to leave don't any more", a reference to the cultural exodus of the Bjelke-Petersen years. "One of the things that drives us [now] is that through the long, dark years of Joh Bjelke-Petersen when I was growing up, people with talent left because they felt there was little here to nurture them. They felt they were more likely to be arrested because it was a place that stifled innovation and creativity," Bligh says. It seems the optimistic, don't-look-back attitude comes from that rejection of the bad old days of bigoted, bulldozing Brisbane. "Nobody mentions Joh Bjelke," says Staunton. "It's like the younger generation don't know about him and the older generation won't talk about him." Ellwood, 42, says people of his generation don't want to be reminded of the "sense of cultural shame or embarrassment" when Queensland was a "national punching bag". This rejection of the past is liberating, he says, and makes working in the visual arts different to working in other cities.

"They are coming from a less confident position. In other places, you are building on a strength, but here you are creating a strength." But it is that refusal to look back at history that finally led Doug Hall to leave the Queensland Art Gallery in 2007 after 20 years as its director. Now back living in inner-city Melbourne, and serving as Australian commissioner for the Australian exhibition for the 2011 Venice Biennale, Hall remains proud and admiring of much of modern Brisbane, but says the focus "on what's happening now and what's happening next" can be limited. He cautions that any discussion of the new, improved Brisbane comes with the Queenslander's "propensity for hyperbole". "No one is better at spruiking and spinning than Queenslanders, who can be quite vulgar," he says. Andrew Ross, since 2004 the director of the lively multi-arts venue, the Brisbane Powerhouse, perched on the Brisbane River in suburban New Farm, also cautions that talk of the city as a new cultural centre should also be tempered.

"What I find difficult in Brisbane is the constant pressure to talk things up and self-promote and the absence of serious discussion about the arts," says the naturally diffident Ross, who was born in Victoria . He agrees that much of the enthusiastic talk about the burgeoning visual arts scene is legitimate, but says there "is quite a bit of work to do in other areas". While contemporary music continues to be a local strength — as it was in the Bjelke-Petersen era — "classical contemporary" music and electronic music are also emerging, Ross says. "We need to do more work in dance and theatre and I do find the classical music scene rather depressing," he says, adding that he thinks Brisbane's cultural future lies in doing something different from what all the other big cities are offering. "There seems to be a national template for the arts. Every city has an orchestra, a state theatre company, a dance company, and now every city has an international arts festival," he observes.

Ross cites the success of the Triennial when he says Brisbane needs to engage with the contemporary performing arts of the Asia-Pacific region "with the intensity the APT does". To this end, he launched the World Theatre Festival in January (more colloquially known as the WTF festival) with innovative dance and theatre from Australia, Indonesia and New Zealand. Its $40,000 budget will grow to $1 million over three years, staring next January, following a philanthropic donation of $500,000 that the Queensland government has matched. How much is hyperbole and how much is not can be debated, but the financial figures and attendance facts coming from the northern capital are disturbing the sleep of arts bosses down south. Victorian Arts Minister Peter Batchelor has claimed that the strategies of the Victorian Major Events Company are being "plagiarised", which causes some mirth in Brisbane. "Did he invent blockbusters? Did he invent marketing?" they joke. The incoming artistic director of QTC, the Brisbane-born Wesley Enoch, looks out at a shiny, new, multi-laned bridge from his office.

"No one uses it," Enoch says. "But Brisbane is always planning to be bigger." The name of the bridge? The Go-Between Bridge, named after the idiosyncratic music group from the '80s. Who says Brisbane doesn't look back at its (very recent) past to face its expanding future? 11