Though now under some challenge, the policy orthodoxy in Australian Aboriginal affairs since the 1970s has been progressive in its social justice orientation, postcolonial in its amelioration of the colonial legacy, and culturalist in its privileging of ethnicity. In this paper I argue that its attempt to recover the past in the face of increasing postethnicity is becoming counter-productive, by stultifying cultural adaptation and compromising individuals’ capacity to engage with modernity. The notions of interculturality and postethnicity point to coexisting ancestral cultures, an imagined, symbolic national Aboriginality, and deep intersection with settler-Australia and the world, and so cultural ‘changing-sameness’ and simultaneous ‘bothness’. The paper argues that a dialectic of public policy and Aboriginal identity politics resists this lived reality, with negative effects. It proposes that a way forward is to engage more fully with the lived reality.