In the second half of the nineteenth century, the two convict-built European settler colonial projects in Oceania, French New Caledonia and British Australia, were geographically close yet ideologically distant. Observers in the Australian colonies regularly characterized French colonization as backward, inhumane, and uncivilized, often pointing to the penal colony in New Caledonia as evidence. Conversely, French commentators, while acknowledging that Britain's transportation of convicts to Australia had inspired their own penal colonial designs in the South Pacific, insisted that theirs was a significantly different venture, built on modern, carefully preconceived methods. Thus, both sides engaged in an active practice of denying comparability; a practice that historians, in neglecting the interconnections that existed between Australia and New Caledonia, have effectively perpetuated. This article draws attention to some of the strategies of spatial and temporal distance deployed by the Australian colonies in relation to the bagne in New Caledonia and examines the nation-building ends that these strategies served. It outlines the basic context and contours of the policy of convict transportation for the British and the French and analyses discursive attempts to emphasize the distinctions between Australia and New Caledonia. Particular focus is placed on the moral panic in Australian newspapers about the alleged dangerous proximity of New Caledonia to the east coast of Australia. I argue that this moral panic arose at a time when Britain's colonies in Australia, in the process of being granted autonomy and not yet unified as a federated nation, sought recognition as reputable settlements of morally virtuous populations. The panic simultaneously emphasized the New Caledonian penal colony's geographical closeness to and ideological distance from Australia, thereby enabling Australia's own penal history to be safely quarantined in the past.