Bedtime for Bastards, three plays by Van Badham. Directed by Dan Walls and Paul Shea, with Liv Hogan, Brett Whittingham, Paul Shea, Catherine Kohlen, Ron Kofler and Dan Walls. Upstairs at the Terminus Hotel, 605 Victoria St, Abbotsford. Until July 17.

The Terminus Hotel is a classic, sticky-carpet Melbourne pub, complete with open fire and space invaders machine, which has somehow escaped the developers. Upstairs, the bar is furnished with a rainbow of sofas in '70s colourings and fabrics: shiny black vinyl to orange to purple plush. I'm waiting for the Sunday matinee, and the light spilling through the windows is the dull silver of winter afternoons the world over, lending a melancholy tenderness to the faded faux-Gauguin reproductions which punctuate the crimson textured wallpaper. This decor calls up memories so old I can't even visualise them, imprints from the youths of my parents. It's far too authentic to be slick. The theatre itself is at the end of a passage: you step through a makeshift curtain, past the tiny stage, into a small, rather likeably proportioned room. The lights go down, there's that hush, the caught breath: and the show begins.

It's a while since I've been to this kind of performance, which is maybe why it strikes me with a particular force. This is the real poor theatre: two planks (or a borrowed lounge suite) and a passion. It happens the world over, in basements or warehouses or pubs or even somebody's loungeroom. Nobody might be there, or the audience might be crammed up to the rafters. No matter: this is theatre's lifeblood, the core of its self-belief. If it ever stopped happening, theatre would be dead.

I've caught the RER to outer suburbs in Paris, eating an unfeasibly huge baguette stuffed with egg and tuna in one of those tatty bistros crammed between concrete highrises, on the way to see some show in a basement. Because it's Paris, it's easy to believe it matters: everyone knows that new, significant work happens first in these out-of-the-way venues, and the show is preceded and followed by long conversations and passionate analysis. It lacks any genteel veneer of glamour: this is the undiluted romance, hard-core and memorable as home-brewed vodka. Without it, theatre is just what it often threatens to be, a mere commodity, a "leisure activity", an entertainment.

Bedtime for Bastards is certainly the real thing. Act-O-Matic 3000, an unfunded independent company of mainly young actors, presents three short plays by Van Badham, a young Australian writer who has been making waves in the UK. Over the past couple of years Badham's work, in productions at the Edinburgh Fringe and the Royal Court, has attracted favourable notice as a feisty theatrical voice speaking a new politics for a new generation.

And it's easy to see why: these plays, each very different from the others, reveal a tough and versatile talent. Badham has a vicious theatrical wit which is perhaps best displayed in the final piece, Capital, in which two PR flacks (Dan Walls and Ron Kofler) are given the job of a lifetime: to "positivise" a video which shows American Marines, high on crack, murdering and raping Afghani children. They have 15 minutes before Colin Powell phones them for their spin, and they use the time to role-play some scenarios of Sadean cruelty.

This is comedy so black you feel guilty for laughing, an unflinchingly angry indictment of a hype-driven, morally bankrupt society. It's intelligent political writing, intelligently directed and performed, which through its pitiless satire escapes the traps of agitprop and earnestness. As the cliche says, truth is the first casualty in war; but this play shows truth in the chair with its hands tied, getting the full Rumsfeldian treatment. From three feet away, the violence is real enough to make you involuntarily flinch. But it's the off-stage violence that stays with you; not only the atrocity of war, but that karmic sense of impending threat the CIA calls "blowback", which is, post 9/11, now an indelible part of the West's subconscious.

The opening play, Morning on a Rainy Day, is less successful. It's a straightfowardly naturalistic portrait of an obsessive and masochistic sexual "friendship". I liked the courage of Liv Hogan and Brett Whittington, who give performances of a disarming candour, but I preferred the heightened styles of the other plays. An Anarchist At Dinner is basically a one-joke play which knows exactly when to stop; I won't say more, for fear of giving away the punchline. It's a deadly accurate satire of the naturalistic conventions of middle-class Australian theatre, and performed with a proper edge of grotesquerie. But Capital is the main event, and tapes Badham as a writer to watch.

There's no credit for a designer, perhaps because there is nothing to design with. There is nothing pretty about Act-O-Matic 3000's production. They have at most maybe half a dozen lights and basic sound, and the props are what the plays require and no more. This theatre aims for a different kind of sophistication, a transparency of emotional affect which relies on nothing except actors and text. It doesn't always get there; but when it does, it's brilliant.

The Act-O-Matic 3000