THE TREATMENT AND THE CURE. By Peter Kocan. Taplinger.245 pp. $14.95.

IN 1966, THE leader of the Australian Federal Opposition was shot and wounded in Sydney by a disturbed 19- year-old named Peter Kocan. Kocan received a life sentence but was transferred shortly afterwards to a psychiatric institution where he spent almost 10 years. In 1975 he won a poetry prize and was released the following year. Since then, Kocan has acquired an impressive literary reputation in Australia, mostly on the strength of his two short novels, The Treatment (1980) and The Cure (1983), published here as one, which deal with his experiences in the mental hospital.

I describe Kocan's personal history, not just because of its relevance to his novel, but because he himself actively draws our attention to t. The details are all surprisingly there in the publisher's blurb. The bizarre shooting has been the pivotal event in Kocan's life, one assumes, and he continues to derive his literary identity from it, even though he has professed in newspaper interviews that his main emotion with respect to the topic is boredom.

Certainly The Treatment and the Cure appear to be just barely fictionalized, less novel than veiled memoir. As an epigraph to the section entitled "The Cure," Kocan has chosen for obvious reasons a quotation from Hobbes: "Imagination and memory are but one thing, which for divers considerations hath divers names." You need not necessarily accept this, however, to appreciate that The Treatment and the Cure is a fine creative work, despite its semi-documentary nature, and that Peter Kocan is a promising writer whose gifts are genuinely in the field of fiction.

The novel's hero is a sympathetic 19-year- old youth named Len Tarbutt. Having been convicted of some sensational, but undisclosed, crime of violence, Len has been committed to the maximum security ward of a psychiatric hospital set inspiringly on the shores of a lake south of Sydney. The story- line is a simple one, and the prose is as unpretentious as Len is ostensibly uneducated, but the book is electric with the tension which often characterizes the literature of prisons or mental institutions. One is reminded in different ways of a cluster of such works: Janet Frame's incomparable Faces in the Water, Koestler's Darkness at Noon, Ken Kesey's One Flew Over the Cuckoo's Nest and Malamud's The Fixer. Like Frame's and Kesey's characters, the now obviously sane Len Tarbutt finds himself surrounded by insanity in all its manifestations, not just the "crims," "dills" and "retards" but the "screws" and the unpredictable doctors and nurses themselves. And, like Koestler's and Malamud's prisoners of conscience, Tarbutt and his llow-inmates are the victims of relentless Catch-22 type "traps," which Kocan has described elsewhere as "intellectually intolerable," going so far as to compare the mind-control systems of psychiatric institutions with those of totalitarian regimes.

TO KOCAN'S credit, such reflections are scrupulously avoided in the novel itself. Its strengths are literary, not ideological. Its considerable dramatic tension derives quite straightforwardly from the classic questions of the genre: Will justice be done? Will Len Tarbutt maintain his integrity, prove his sanity, and beat the system? But Kocan also has a good ear for dialogue, a strong visual sense ("the lake . . . like wrinkled iron"; "In your head an image: a gigantic black snake, lunging from the sweet grass"), and an unfailing capacity for seeing the funny side of even this most trying of existences.

Above all, he has a knack for stringing together rapid sequences of scenes -- some chilling, some hilarious, some profoundly sad -- which work cumulatively to complicate our judgement of the mental hospital. Kocan is not interested in "slandering" the place, to which he in some ways attributes Len Tarbutt's (and his own?) recovery, or salvation, despite the horrors he records. At the end, Len watches "hundreds of ducks . . . rising into the evening sky, gathering into the salt air above the lake, making a soft swish of wings over Elsie Haggart's drowning place." He is thinking, "You'll be seeing these ducks for years yet. Maybe you'll be released one day but it doesn't seem very important. . . . You watch the ducks go over, each one frail and separate within the dark mass, and you wonder what you really feel about the hospital. Right now it seems very beautiful. The thought comes that the beauty could not be so much if it weren't for the pain underneath. No, you can't hate this place."

Len Tarbutt has earned this uncharacteristically abstract reflection which, like much of the book, sounds more obvious than it is, for from the beginning every incident or encounter has shown something of this intimacy between beauty and pain, good and evil. The disarming simplicity of Peter Kocan's prose signals, in the end, not simple- mindedness but innocence. Now, perhaps, he may finally be able to drop the persona of the former mental patient, the "crim," the freak, which he has used to justify or advertise his work, and come confidently into his own as the writer he really is.