Abstract Transient magnetic activity, recorded at five stations near the coast of south-east Australia, is analysed to determine the correlation between the vertical and horizontal variation fields. A first order estimate of the “coast effect” is thus obtained. A plot of the strength of this effect against the distance of the observatory inland is compared with results from other coastlines. Consistent with the known geology of the area, the curve for south-east Australia lies between that for a young, tectonically active province, and that for an old, stable field. The results are fitted to a model of a simple step occurring in the upper surface of a perfectly conducting medium. This can be interpreted in terms of a high electrical conductivity region at a depth of some 230 km below the surface of the continent, rising to some 30 km below the surface of the ocean.