The countries of Australasia, from the continent of Australia to the many small island nations of the Pacific, were colonised by European imaginations as places of strangeness or paradisiacal wonder. Those fantasies stand in stark contrast to the brute realities of colonialism. This chapter examines how Australasian magical realist literature ironises and destabilizes the 'beautiful lies' of colonialism. This chapter's overview is focused on Australia and Aotearoa/New Zealand, where the circumstances of colonisation encouraged dominant traditions of fiction writing. However, the chapter also recognises how magical realist literature from Australasia engages traditional forms of storytelling to rupture the hegemonies of empire. Indeed, Indigenous authors have been significant contributors to Australasian magical realist writing, which ironises and destabilizes the 'beautiful lies' of colonial history to represent experiences of trauma and dispossession, but also to assert a dynamic and polysemous sense of survival embodied in the dynamic and polysemous nature of magical realist fiction itself.