This paper adopts a broad regional perspective to review some of the major challenges currently confronting social policy in Australia and other Pacific rim countries. It begins by making the distinction between social policy and social protection and notes that the development of a welfare state is only one possible means through which governments can achieve their social goals. Recognising the specificity of the Western welfare state is an important ingredient to any comprehension of social policy which has broad significance to the region given the different forms and development of social policy currently in existence. Three main social policy challenges are then identified and discussed. They are the economic challenge, the demographic challenge and the political challenge. The broad elements required of any effective response strategy are then outlined and a brief review is undertaken of some recent initiatives that are consistent with the evolution of a regional framework for the analysis of social policy.