The last decade has seen a surge of interest in Aboriginal art, with its exotic origins in dreamtimes and creation myths. In Place (Out of Time), the new show at the Museum of Modern Art in Oxford, is particularly interesting because it does not separate aboriginal art from art made by people of Western descent. Rather than compartmentalising the two categories, this show lays them out side by side to reveal the diversity of the art scene “down under”. From “dot” paintings in the dreamtime tradition you pass to a powerful political installation, from a video to a frieze of highly-stylised bark paintings.

Reverberating through the ex-hibition is a strong sense of place. Sometimes you can almost feel the wide open spaces or see the red ochres of the desert. They are called up, for instance, in Rosalie Gascoigne’s wall and floor pieces, made from the detritus of human habitation found by the artist in the countryside around Canberra. The work is uneven but the best, such as All Summer Long, constructed from pieces of Schweppes crates, mimic the way the land is tempered by the weather.

Though living on the edge of the Great Sandy desert and coming from a very different tradition, Eubena Nampitjin’s paintings have a similar resonance. Using designs derived from sand and body painting, their glowing earth colours pay tribute to the land and its spiritual associations with ancestors.

Do not be misled into thinking that this is a backpacker’s guide to Australia. The exhibition raises uncomfortable questions about Australia’s - and by association Britain’s - colonial past and asks what it means to be an “Australian” today.

The heart of the display is Fiona Foley’s spectacular installation, Velvet Water, Laced Flour. One whole wall is painted blue and lined with a series of open, stainless-steel boxes, while a trail of white flour is laid along the gallery floor. Seductive but worthless, the contents of the boxes represent the beads and trinkets given to Aboriginals in return for their land.

Judy Watson, who represented Australia at this year’s Venice Biennale, makes a similar point in three delicate etchings: “My bonesmy skinmy hair in your collections”. Pinned to the wall in the manner of museum specimens, they reveal her shock at finding the body parts of her ancestors in Western museums.

There is a tendency to see Aboriginal art as craft or decoration. Playing on Mondrian’s geometric forms, Gordon Bennett presents a succession of kitsch black faces trapped by the grids of modernism. At once comic and angry, his large, flat canvasses challenge stereotyped views.

The display itself confounds artistic stereotyping, showing artists of Aboriginal descent working in the mainstream of contemporary art as well as in more traditional methods. Even between the older techniques there is a marked difference in style. Eubena Nampitjin, for instance, uses the wooden end of the brush to apply acrylic paint on to canvas. In Central Arnhem Land, on the other hand, highly-stylised and very beautiful symbolic ancestral designs have been painted on sheets of bark.

The exhibition also contains a huge joined canvas by Imants Tiller. A shifting kaleidoscope of references to art history linked to meditations on immigration and dislocation, it reflects his experiences of emigrating to Australia from Latvia.

Lastly there is Mike Parr’s video, which seems totally out of place in an otherwise sensitive exhibition. Perhaps reflecting the machismo for which Australia would rather not be known, it lingers on various degrees of self-induced mutilation. Fortunately, as far as younger viewers are concerned, it can easily be avoided.

The education programme promises to be as inclusive as the exhibition. School visits can be tailor-made but one idea is to use the exhibition as a blueprint for “mapping” activities with children recording journeys between home and school or special places.

With themes of identity, travel, colonialism and immigration involved, it is hoped to include history, geography and drama as well as art teachers. For the special preview for teachers on September 19, the museum has recruited three special guests. Rebecca Hossack, cultural officer at the Australian High Commission, will speak on the exhibition; John Hukin from Rosecroft Secondary School in North Yorkshire will be available to talk about a successful residency in his school by Aboriginal artist Raymond Edney; Timothy Massey is headteacher of local Millbrook Primary, which has formed a close link with the gallery. As a consequence of museum visits, last term’s Ofsted report commented on the benefits to the school’s artistic standards.

Until November 2. Visits, workshops and INSET days can be booked by phoning Emma Thomas on 01865 813815