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The ‘Third Way’ politics of Blair's New Labour government of the United Kingdom has popularised a number of policy reforms centred on a supposedly new discourse of ‘devolution’, ‘inclusion’, ‘partnerships’ and ‘community’. These notions reflect a re‐emergence of the ideas and values of civil society, participation and localism. Key drivers of this discourse are: new conceptions of citizenship; a retreat from the social state to a politics of community; and a questioning of both ‘big‐state’ interventionist and competitive market approaches to public policy. These trends have resonance in the Australian context. The welfare reform agenda of the Australian Commonwealth government together with community building and engagement initiatives of State governments have been sites for these policy directions. Much of the debate surrounding these policies excludes or minimises the fundamental role of an active state by focusing on an uncritical conception of community. Drawing on the notion of network governance, an alternative framework for re‐conceptualising state‐community relations and delivering improved community outcomes is posited. The paper concludes by suggesting possible social governance methodologies for actioning this framework.
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