As part of the renewed emphasis on national identity and citizenship, interest in civic education in Australia has increased. Although both Labor and Liberal national governments have been committed to introducing civic education, there is little research to show that the politically knowledgeable citizen is the more sophisticated and competent citizen. This paper uses survey data collected in 1996 to examine the extent of political knowledge in Australia and to analyse its consequences for political literacy, competence, and participation. The results show that the median citizen could answer two out of seven factual questions correctly, with women, the young and those with less education being more likely to provide incorrect answers. The relationship between knowledge and attitudes and behaviour shows that factual knowledge increases political literacy and, to a lesser extent, competence. However, knowledge has little effect on political participation, a major goal for civic education among politicians. Overall, the increased political knowledge that civic education creates is more effective in generating positive views of democratic institutions, and less effective in shaping political behaviour. The democratic citizen is expected to be well informed about political affairs to know what the issues are, what their history is, what the relevant facts are, what alternatives are proposed, what the party stands for, what the likely consequences are. (Berelson, Lazarsfeld and McPhee 1966, 308)