John Grant is a disillusioned middle-class schoolteacher struggling under the weight of a financial bond he signed with the government in exchange for his tertiary education. This bond has tethered him to a two-year teaching post at a remote school in Tiboonda, a township nestled in the arid outback. With the onset of the Christmas holidays, John plans a trip to Sydney to reunite with his girlfriend Robyn, but first, he must catch a train to the nearby mining town of Bundanyabba—affectionately known as "The Yabba" by locals—to secure his flight.
Upon his arrival in The Yabba, John frequents a local pub where he encounters the friendly policeman, Jock Crawford. They bond over multiple glasses of beer—first at the pub, then at an RSL club, where they experience a disconcerting ANZAC memorial service. Jock introduces John to the underground gambling game of two-up and to Clarence "Doc" Tydon, a vagrant, alcoholic doctor who fiercely challenges John's snobbish view of both The Yabba and its inhabitants. Feeling lucky, John joins in on the two-up games, initially riding a wave of fortune. However, his growing desperation to win enough money to clear his bond leads him to gamble recklessly, ultimately losing his entire savings in a matter of rounds. Now stranded in The Yabba, John faces the brutal heat and quirky, sometimes menacing, locals.
Over drinks, John befriends Tim Hynes, a local, and visits Tim’s home, where he meets his adult daughter Janette, alongside miners Dick and Joe. The group indulges in an all-day drinking binge, culminating in Doc joining them. During an intimate conversation, Janette expresses her longing for a life beyond caretaking for her father and his friends and makes an aggressive pass at John, who is repulsed—resulting in him losing his lunch partly from disgust and the excess beer.
As he delves deeper into the debauchery with Tim, Doc, and the miners, John eventually seeks solace at Doc's secluded shack. There, Doc provides him with medicine for his hangover and kangaroo meat for sustenance, all while sharing his perspective on life. He reveals that his alcoholism has barred him from a medical career in Sydney and discusses his unconventional, open relationship with Janette filled with unusual sexual escapades.
A night of mayhem follows as John and Doc team up with Dick and Joe for a drunken kangaroo hunt. The ensuing chaos includes Joe’s brawl with a kangaroo and John awkwardly stabbing another creature in a fit of drunkenness. Their night spirals further as they vandalize a bush pub, which leads to brutal fighting among friends, interrupting Doc's philosophical monologue about civilization's brutal nature. As dawn breaks, John finds himself back at Doc's shack, where he is caught off guard by Doc's advances, which repulse him.
Feeling lonely and regretful, John leaves the cabin and returns to town. There, he receives his two suitcases—left behind at a hotel after meeting Tim—returned by Jock Crawford. He discards one that contains mostly textbooks, including a tome on Plato, and begins his trek through the desert, hitchhiking and hunting for food with the rifle he received during the hunt. Ironically, after all his efforts, John mistakenly ends up back in The Yabba instead of Sydney.
Furious with Doc's peculiar lifestyle, John rushes to his empty cabin, fueled by thoughts of revenge. However, consumed by despair and isolation, he turns the rifle on himself. Doc arrives just in time to witness John's failed suicide attempt, which leaves him scarred but alive. After recovering in the hospital, John signs a statement from Jock claiming the incident was accidental. Several weeks later, Doc takes him to the railway station, where an unspoken peace is reached between them. Transformed and more self-assured, John returns to Tiboonda, ready to embrace the challenges of the upcoming school year with a newfound understanding of both himself and the outback's peculiar denizens.
