In the last decade, the Federal Government has become involved in supporting children's services on a scale previously unknown. During this time, the Government has significantly changed the nature of its support. The constant changes to the Children's Services Program and particularly the restructuring of the Program in recent years have created heated debate about the role of the Federal Government in this field. At the heart of this debate are different perceptions and interpretations of children's needs and rights and who is responsible for meeting them. Because "children's welfare" is such an emotive topic, these different perspectives are often not clarified. The debate, therefore, is often confused and is reduced to arguments solely about levels of funding rather than the principles on which funding should be based and the priority which should be given to young children in the development of policy. In this paper we attempt to identify and clarify some of the changes in, and the diversity of, the debates about children's needs, rights and responsibilities. In doing so, we seek to establish the reasons why early childhood is an important phase in human development. We then attempt to illustrate that the Federal Government has taken initiatives in the field of child welfare; that its reasons for doing so have been different from reasons for States' intervention; and that usually such initiatives have reflected political expediency rather than well founded concern about children's welfare. Results of surveys on child care arrangements conducted by the Australian Bureau of Statistics show that child care is required by the majority of families and its widespread use gives it the characteristics of a public utility rather than a welfare service. Two-thirds of children of pre-school age are in care at some time during the week and close to 40 per cent of these experience more than one type of care. Although the highest use of care is made by families where both parents are employed, child care is used by other families as well. It is used more often by two-parent families than by one parent families and more often by families with higher incomes than by those on lower incomes. Increasing participation of women in the workforce and the difficulties experienced by families in rearing children in today's social and economic environment suggest that the need for child care services will continue to grow. The paper argues that there is a case for government responsibility to provide services for children so as to enhance their well-being as well as the functioning of the family unit. These goals are not so much a matter of ‘welfare’ but one of national interest.