Howard had promised that Australia would be relaxed and comfortable under his rule, yet this year Australians had become more fearful and suspicious of each other than ever, a state of affairs that Howard's government seemed happy to exploit.

Howard's divisiveness and his skilful manipulation of public opinion obscured the strange paradoxes of his era. If he flirted with racism, it was nevertheless under him that Australia ended up with the largest immigration programme in its history. His foreign policy was notoriously sycophantic to the Bush administration. Yet while he often seemed little interested in Asia, over the past decade Australia became far more closely tied in terms of trade to China, India, Japan and Indonesia, and its destiny ever more deeply enmeshed with the coming Asian century.

If he was the most ideologically driven prime minister Australia has had, on occasions he acted entirely out of character: his courageous introduction of comprehensive gun laws in the wake of the Port Arthur massacre in 1996, and again, under enormous public pressure, his sending of a peacekeeping force to East Timor to halt a campaign of repression covertly sponsored by the Indonesian military after the East Timorese voted for independence - flying in the face of Australia's long-standing policy of support for Indonesia.

Howard's seeming blandness disguised his ruthless determination radically to reshape Australia. His politicisation of the public service severely weakened that institution; his government's ceaseless and ferocious attacking of alternative points of opinion brought a disturbing conformity to Australian public life; and he stacked body after body with sycophants and far-right ideologues to prosecute his causes through society.

Then there are the lies: the most extraordinary was his declaration that he would not introduce a consumption tax, though he later did; and the most shameful was the infamous children overboard case. At the height of the 2001 election, Howard's ministers claimed that refugees on a boat approaching Australia had thrown their children overboard, leading Howard to declare: "I don't want people like that in Australia." Only after the election was it proven that the government had known the claim was false.

His condoning of the imprisonment of David Hicks at Guantánamo Bay without trial for five years, and the subsequent gagging of Hicks until after the election, suggested a growing contempt for human rights and the rule of law that was most frighteningly on display with his anti-terrorism legislation, much criticised for its provisions of secret trials and imprisonment.

The mandatory detention of refugees was vigorously defended and extended by Howard, though revelations of Australian citizens being locked up by accident for several months, and in one case deported to the Philippines, spoke not just of incompetent administration but of a darker heartlessness, echoing the infamous Tampa episode of 2001. When 400 refugees were rescued from a sinking boat and left stranded in the tropical heat on the deck of the Tampa, a container ship, Howard very publicly refused permission to land the refugees in Australia, an act that for many epitomised the brutal meanness at the heart of his government.

Though the country became far more chauvinistic under Howard, and though he often invoked the idea of Australia as justification for his government's actions, he had no compunction in frequently going against the will of the people - whether in refusing to say sorry to black Australia in the face of the reconciliation movement; slowly and expertly destroying the widespread desire for a republic; or committing Australian troops to the Iraq conflict following anti-war demonstrations that were the largest in the nation's history.

Then something strange happened: history changed and the times no longer were his. His ever lonelier support for the Bush administration's adventurism looked increasingly foolish and possibly dangerous. The very climate of Australia was transformed. Every mainland capital city now has a water supply crisis so severe that people have been murdered by neighbours for watering gardens. Yet in the midst of a once-in-a-thousand-years drought, Howard remained until late last year a climate sceptic. His supporters dismissed global warming as they had so much else - more hysteria from the left. But it wasn't: it was the world and the world had changed.

How odd then that, by voting in Kevin Rudd's Labor party, it seemed in many ways that Australia was simply replacing one older short man with glasses with a slightly younger short man with glasses. Where Howard was a reactionary radical, Rudd is a religious conservative once described by a fellow Labor MP as "about as interesting as carpet".

Rudd's conservative agenda was often difficult to distinguish from Howard's. He was declared a "heartless snake" by the Aboriginal leader Noel Pearson after swinging to the right of Howard on Aboriginal reconciliation in the final days of the election. His claim to be strong on climate change rings hollow when he has promised a subsidy of A$110m to Gunns Ltd, a company intending to build one of the world's biggest pulp mills in Tasmania, which will burn half-a-million tonnes of native forest a year in the monstrosity of its electricity generator alone. Was this Howard's greatest victory: the creation of a Labor party in his own image?

In the wake of his defeat the attacks on Howard's legacy will turn ferocious, but at their heart will be an unease, a ritual exorcism of something deeper that Australians would perhaps rather not admit. For a decade Howard's power had resided in his ability to speak directly and powerfully to the great negativity at the core of the Australian soul - its timidity, its conformity, its fear of other people and new ideas, its colonial desire to ape rather than lead, its shame that sometimes seems close to a terror of the uniqueness of its land and people.

At the end of his concession speech, Howard claimed to have left Australia prouder, stronger and more prosperous. But it didn't feel that way. It felt like it had been a lost decade. It felt like the country was frightened, unsure of what it now is, unready for the great changes it must make, and ill-fitted for the robust debates it must have.

There was a strange sense that Australia, which had seemed so often to sleepwalk, mesmerised, through the past 11 years, had suddenly woken up. But where it might go and what it might do and be, no one any longer knew.

· Richard Flanagan is an Australian novelist whose most recent book is The Unknown Terrorist