This paper presents a brief overview of changes in responsibility of the state for the provision of welfare services in Australia and considers some of the changes currently being introduced to the welfare mix in Australia. It focuses on two illustrative case studies: health care and the shift in long-term care away from a reliance on nursing homes towards a system of community support. In health care, the pressures on State Governments to achieve efficiency in the public sector has to some extent been offset by the expansion of private investment in commercial health services, with the net result being a gradual increase in the importance of privately operated hospitals and other health services. In the field of long-term care the dominant position that private nursing homes long enjoyed has to some extent been restricted as a result of a combination of measures taken by Commonwealth Government. Despite the limitations of the available evidence it seems clear that there is no single trend which has shaped developments over the past decade. The available data point instead towards increasingly complex patterns of provision with service provision following a number of often contradictory lines of development. As the different levels of Australian government face these contradictory demands, the results are likely to be increasingly diversified, hybrid systems, in which government, market, voluntary and community organisations and families are increasingly interconnected.