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A common stereotype of Australians is that they are good natured, down to earth, use slang, have a pragmatic sense of humour, have a larrikin streak, are free of worries and are quite adaptable. On the whole, the stereotype is quite accurate.

The stereotype was broadcast to the world on a huge scale with the 1986 smash, Crocodile Dundee. In the story, wealthy reporter Sue Charlton (Linda Kozlowski) hears about the heroic tale of survival of Mick Dundee (Paul Hogan) and flies to the outback to verify his story. As they travel to the outback, she falls in love with his unpretentious honesty, and good spirited dishonesty. He secretly uses a razor to shave, but when he hears her coming, he pulls out a huge knife and pretends to shave with it. He looks at his mate’s watch then pretends he can tell the time by looking at the sky. One night, the two are visited by one of Mick's Aboriginal mates on his way to a corroboree. Sue tries to take the man's picture, but the blackfella says:

"You can't take my picture"

Sue responds:

"You are afraid it will take away your spirit"

Blackfella answers:

"No. You got lens cap on."

The blackfella then wanders off into the bush. Sue asks Mick how his finds his way in the dark. Mick says: "telepathy." Then there is the sound of the blackfella walking into a tree, and an anguished cry:

"I hate the bush."

The underlying message behind the jokes is that stereotypes of Australians are not always accurate, but that Australians like to have fun with them anyway.

Sue convinces Mick to accompany her to New York. Dundee accepts, and soon finds that New York life is very different from the life he is accustomed to. Showing great adaptability, he acclimatizes himself with the new surroundings. Walking down the street, a mugger pulls out a knife and demands his wallet. A timid Sue tells Mick to give the mugger his wallet because:

“he's got a knife.”

Mick laughs and says:

“That’s not a knife”

Pulls out a huge hunting knife, looks at it, and with a voice of admiration:

“That’s a knife!”

Mick meets a “lady” in the pub, but is completely unaware that the “lady” is really a man. When informed of the situation, he verifies the gender with a quick squeeze of the groin area. Later, he meets a particularly ugly lady who he concludes must also be a man. Another squeeze of the groin reveals that, no, she is really a woman, and one that quite enjoyed Mick's exploratory hand.

Crocodile Dundee is generally referred to as a 'fish out of water' tale. Although this may be an apt description for the sequels, the story is more a Seinfield style of holding a mirror of pragmatism at Americans and Australians alike. It plays on stereotypes of Australians and makes fun of them, while at the same time, reaffirming them. It is both real, and a joke, at the same time.

Like Gallipoli, Crocodile Dundee had a huge influence on Australia. World wide, it generated immense good will for Australia which in turn generated a dramatic rise in tourism - particularly from the United States. It also laid the groundwork for another Crocodile man, Steve Irwin, to create larger than life wildlife documentaries that likewise made fun of stereotypes while simultaneously affirming them.

Domestically, Crocodile Dundee initially created a wave good will that was another shot in the arm to the Australian movie industry. A series of quirky comedies were subsequently released that rode on the back of the growing sense of national pride.

Longer-term, however, Crocodile Dundee became a source of division. Australia's inner-city intelligentsia, who don't share the movie's sense of humour, became concerned that the movie portrayed an unrealistic image of Australians. They argued that most Australians don't have blond hair, don't wrestle crocodiles, don't live in the outback and don't say 'g'day'. For Geoffrey Barker of the Melbourne Herald, the movie reinforced international perceptions that "Australians are gauche, provincial and philistine". Another concerned citizen, Veronica Brady, said the film was about "colonial servility, violence and a profound confusion of values". Presumably, the concerned citizens thought that a "true" Australian lives in an inner-city terrace, drinks soy-milk, complains about Crocodile stereotypes and is gay. In some regards, their complaints were as silly as an Englishman getting upset about James Bond movies on the grounds that most Poms do not save the world, are not gentlemen, and don't seduce lots of women.

Hogan's response really hit the nail on the head regarding the origins of the criticism, as well as the folly of them:

Despite the absurdity of getting worked up over a feel-good movie, subsequent Australian outback movies seemed intent on correcting the untrue stereotypes promoted by Crocodile Dundee. Instead of the outback being depicted as a place of good-natured larrikins, the Australian movie industry became forceful in depicting the outback as a place of rednecks, racists, murderers, homophobes, and sexists. In their process of throwing mud, they took themselves down a pathway that basically destroyed their industry, and sent themselves towards the unemployment line. Furthermore, 20 years later, instead of the world having a stereotype that Australia is home to good natured larrikins, the world started building the stereotype that Australia is home to murderous celebrities, serial killers, and homosexual transvestites. Arguably, most of the world prefers the former.