The title of Robert Drewe’s latest novel, Grace (2005), shares with J. M. Coetzee’s antonymous Disgrace (1999) a polysemous quality which derives from both works’ attempt to capture the ethical stance of a society in a way which has personal and political ramifications at the same time. The Australian text shows some concern with the predicament of a boatload of asylum seekers from Indonesia, who later escape from their detention centre in the Kimberleys; but Drewe’s progressive denunciation of Australia’s treatment of refugees is potentially compromised by the Australian anxiety over territorial integrity which provides an unshakeable context for this kind of thematic development. More generally, my paper will explore the ambiguities attending a discursive move which seeks to absorb race into larger categories of political meaning, and the related difficulty of achieving the ‘grace’ of complete freedom from colonialist parameters in an Australian culture where some suspense over territory continues to brood.