FOR AMERICAN readers wishing to acquaint themselves with Australia through its literature, Jessica Anderson's new novel should prove a double bonus. On the one hand, it offers a rich, possibly devastating portrait of the manners and morals of the Australian urban middle-class today. On the other hand, it is fully as intelligent and elegantly written as Anderson's earlier novel, Tirra Lirra by the River, which was so well received here last year. It delicately incorporates into its plot a debate about what it "means" to be Australian, but on a higher level it is about the value and purpose of people's lives in the "mess, muddle (and) discontinuity" of the modern city, any modern Western city, although this one happens to be Sydney, and it is for the depth and lucidity of its insights on this level that The Only Daughter deserves to be remembered.

"She raised her eyes to the sky. The clarity of the light, of course, was marvellous; she did not know why she sighed." How well these sentences sum up the the peculiar condition of cultural ambivalence typical of many well-educated Australians, of whom "she," Sylvia Foley, is one. It is 1977, a politically and economically unsettled year in Australia. After a two-year absence in Europe, Sylvia has just returned to her native Sydney and a potentially explosive family situation. Her father, wealthy Jack Cornock, is about to die after having suffered a massive stroke, and his wife Greta, Sylvia's stepmother, and his four stepchildren are all constrained to wonder, more or less publicly, why Sylvia should have chosen to return home at just this moment. To add to the exquisite difficulty of Sylvia's position, she has to hande at the same time an uneasy relationship with her own mother and the rekindchment with one of her about-to-be-disinherited stepbrothers. Fine shadings of moral character are wonderfully revealed when the will of a rich, ailing parent is at stake, and Anderson uses this device skillfully to bring her large and complicated cast into focus.

Sylvia is a sensitive and observant young woman, and under the circumstances it is not surprising that she should sigh -- despite the brilliant Australian sunlight -- and compare Sydney unfavorably with Rome or London. Her discomfort in Sydney cannot be attributed entirely to esthetic or cultural alienation. Jessica Anderson's chief interest in her characters is, I think, moral: Are these good people? What does it mean to be good? From whose perspective is one to judge anyway?

Few characters in the novel emerge from Anderson's many-angled scrutiny altogether free of the suggestion of moral weakness, whether it be Sylvia's debilitating self-doubt and chronic disengagement or her stepbrother-in-law's outright corporate criminality. Only sour-smelling Siddy, Jack Cornock's gardener and general factotum, is able to produce an impression of unqualified goodness of heart, though that moment shines like a lamp through the overall moral fog. At Jack's funeral, an abrasive young clergyman is subtly abusing the mourners for bringing him a stranger to bury. "'As I did not know the deceased in life, I had to make enquiries about him. . . . He prospered, so he must have been industrious. He gave money to charities, and in that, whatever his motives, was an element of good. We are therefore here today to mourn the passing of a man who was industrious and charitable -- '

"'And to pray for his soul,' cried Siddy in a loud voice."

YET IT IS impossible to separate the spirit of moral enquiry in The Only Daughter from the continuing debate about Australian cultural identity which so preoccupies Sylvia -- and the author? -- since she sees that question precisely in moral terms. If Sydney is physically a place of "rawness and incoherence," lacking "wholeness" or "any heart," then it must not only offend the eye but also subtly corrupt the spirit of whoever lives there. To Sylvia, Sydney-siders with their "mostly Hogarthian presences" are "people who have repudiated tragedy and . . . flattened out their lives into a comfortable utilitarianism." This is why the novel's many set speeches about Australian urban architecture, or lack of it, amount to an indictment of a general spiritual condition, of which "the heavy Teutonic concrete city of Sydney" is merely an expression. "The only thing wrong with this country is the people. The country itself is beautiful, it's the stuff that people have put on it. If we had a population with any spirit and depth and courage, we would have an architecture. As it is, we have none." The feelings of bitterness, self-hatred and paralysis experienced by the novel's most thoughtful characters are quite unsettling in their intensity.

It is a tribute to Anderson's intelligence that she does not give self-hatred the last word. It is probably no coincidence that those characters who are least venal with respect to Jack Cornock's disputed legacy -- Siddy, Sylvia's brother Stewart, and her lover and stepbrother Harry -- are also the least cerebral and disaffected with respect to their country. Harry tells Sylvia, "I envy your brother Stewart, who simply accepts it all, the bad and the good, and thinks it's the best place in the world. My difficulty is, I don't think it is, but I feel it is. You say you feel your dislike with your body as well as your eyes and mind, but I feel my affection in exactly the same way." And the novel's ending, not to be given away here, wordlessly vindicates Harry, admitting through Sylvia's own choice the possibility that, even in Sydney, one may lead a good and happy life.

For its exceptional intelligence, for its fastidious style, mordant humor and razor-sharp dialogue, for its moral seriousness, and for an unforgettable introduction to Sydney, warts and all, The Only Daughter is highly recommended.

Elizabeth Ward is an Australian-born resident of Washington. She is the author of "David Jones: Mythmaker."