By most measures – excluding potentially deadly fauna per capita – Australia is as pleasant a place to live as presently exists. It is wealthy, secure and largely well run. Its major cities are fixtures on lists of the world’s most agreeable urban centres. Its countryside is plentiful and beautiful. A culture of breezy egalitarianism and a generally observed belief that a fair day’s work merits a fair day’s pay combine to reward the ambitious and industrious. The information revolution has all but eroded the cultural remoteness that was once a consequence of its geographical isolation. Australia is, unsurprisingly, a destination desired by millions of would-be emigrants.

It may seem, therefore, at best counter-intuitive and at worst outrageous that so many of us entitled by happenstance to make our lives in Australia choose not to. Estimates of the size of the Australian diaspora vary but it certainly numbers well into the hundreds of thousands.

Anybody who chooses to live away from their home country has to be able to answer two questions: “Why leave?” and “Why stay away?” For Australians the first one is easy. It’s the common desire to see some of the world. The second question is tougher than it once was. As recently as when I left in 1990 a sense persisted that Australia was a small puddle, a not-big league. There was a feeling that Barry Humphries had been correct when he’d spoken for his fellow distinguished exiles of the 1960s and 1970s – Robert Hughes, Clive James, Germaine Greer et al – and said that staying in Australia is like going to a party and dancing all night with your own mother.

That is no longer the case. Among the depressing quantities of Australians now younger than myself there is no sense of inferiority. The stint overseas remains a rite of passage but more in terms of acquiring professional experience than youth-hostel fleas. Australians have realised that there are reasons why our cities in particular are so highly rated as places to live.

There are, however, still good reasons for choosing to be an Australian abroad. Granted these may apply disproportionately if your work involves journalism and/or travel: it will simply never be possible to reach datelines in Europe, the Middle East, North Africa and the US in less than a day from Sydney or Melbourne. It’s also easier being on the other side of the world than it used to be: many English supermarkets now stock Vegemite, having doubtless conceded its superiority to the Marmite facsimile.

But there are other upsides. When you put yourself about in the world many of the assumptions people make about you are rooted in their perceptions of your nationality. An Australian passport is an excellent calling card. Most preconceptions seem to be positive; at least, few people have all that much against us.

Australians abroad are beneficiaries, in this respect, of their homeland’s essential contradiction, of being all at once a big country and a small country. And yet there’s still only about 24 million of us, most of whom you have to go a long way to meet. Those of us available to personally downplay or exaggerate, as we see fit, the role of kangaroos and koalas in our everyday existences are therefore endowed with a certain rarity value.

And you can always go home. Though the flight between London and the east coast can feel like a lesson in what a long time 24 hours can be, it is still – really, seriously – only a day away.

For most of Australia’s history, the world was run by countries like its own. When a quarter of the globe was coloured red, it was part of the British empire. Throughout the Pax Americana, Australia has been a treaty ally of the US.

Now, however, wealth and power are shifting eastwards. I am sceptical of the lurid claims about US decline but it is undeniable that as other nations rise, America’s margin of superiority shrinks. And the postwar liberal international order, from which Australia has benefited, is becoming less liberal, less international and less orderly.

These changes can be discombobulating. The People’s Republic of China is now simultaneously Australia’s largest trading partner and its principal ally’s most serious rival. For many years, Australians complained about the tyranny of distance. Now the tyranny of distance has been replaced by the predicament of proximity.

Some say the answer is to downgrade the US alliance and upgrade the China relationship. But the better course is to persist with our current three-dimensional foreign policy, which requires us to work with our global ally, strengthen international institutions and enliven our connections with Asia – and to manage the tensions between these three objectives.

We will need to enlarge our approach to the world, however. We need more Australian journalists on the global beat and a foreign-policy debate that is free of the small-country thinking that usually runs through our national conversation.

We need to sharpen our tools for dealing with the world. We have fine diplomats but they are thin on the ground. The Turnbull government should expand our diplomatic network and establish new posts in countries where we need more coverage.

In recent years, Australia’s politics have become smaller. Dysfunction stalks the parliamentary corridors in Canberra. Australia has had five prime ministers in five years. We need to make our politics larger, which will take leaders with imagination, ambition and the power of persuasion. And it will require the public to set aside its cynicism.

Finally, Australians should replace the monarchy with a republic. Our head of state should be an Australian citizen, someone who lives here, who is chosen by Australians and who represents Australians. Becoming a republic would make us prouder and more purposeful. It would be a demonstration of confidence in our shared future.

Australians have a choice to make. Are we content to be a little nation, anxious about the world and disposed to self-doubt, with a negative political system and a meanness of spirit about? Do we want to be a nation with a limited diplomatic network, a modest defence force and a cramped vision?

Or do we want to be larger than this – a big, confident country, open to the world and alive to the attractions of diversity; a nation with a reforming mindset, a generous debate and a serious public life; an ambitious country with the instruments that enable us to influence the balance of power in Asia; a people with enough confidence and self-belief to have our own head of state? We need a national conversation about this choice. I hope the men and women of Australia decide to think big.