This paper examines the marginalisation of multicultural and multilingual discourses that occurred in Australia in the mid-1990s and that continues to the present day. The contemporary struggle between national and multicultural identities is considered against the background of the re-emergence of nationalist discourses across many Western democracies as a consequence of changing global social and economic forces. This is the new age of "liquid" modernity, as theorised by Bauman, a kind of chaotic continuation of "solid" modernity where risk and uncertainty accentuate the vulnerability of the individual rather than uniting individuals to defend their rights. During this time, Australian governments, both Liberal and Labor, have increasingly supported universalising social inclusion/social cohesion policies to the detriment of multicultural policies. In the concluding section, this paper reflects on current trends and future challenges and provides a perspective on what may be required for a successful programme of accommodation and incorporation of cultural and linguistic diversity in Australia.