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It has been observed that countries that implemented new public management (NPM) reforms are currently witnessing growing complaints about a decline in the policy capacity of their public services. Australia is a part of this trend with public sector leaders increasingly voicing concern about policy capacity decline within the Australian Public Service (APS). This article sets out to examine whether there is an empirical basis for this discourse and to assess allegations that NPM reforms have contributed to any related shifts. It draws on rail policy and the Department of Transport as its case study. It finds that the reforms transformed role of the department in a way that enhanced strategic policy capacity. However, the reforms also introduced a number of structural impediments that make it difficult for the new role to be effectively executed.

In an increasingly volatile, uncertain and complex world governments internationally are seeking new frameworks to think about future directions which can guide policy choices that can be turned into realities. This article presents an insiders' case study of the initial development of the Victorian Labor government's Growing Victoria Together, launched in November 2001; it expresses the vision, policy priorities and its key progress measures. It has been developed to guide medium-term policy choices, communicate directions to citizens and engage stakeholders to think collaboratively about the future. The article notes the emerging international interest in alternatives to public policy paradigms based on economic rationality, market decision-making and organisational managerialism and outlines the steps and actions involved in developing its public release and the first stages of implementation. It concludes by reflecting on lessons which can be learned from this experience for exploring new strategic policy frameworks.