This background paper was commissioned to survey the condition of child care in Australia. The first three sections give statistical data on the current patterns of care arrangements and the factors contributing to a demand for expanded and more flexible child care services, i.e., family composition, income, and work arrangements. The next section summarizes the changing role of the Australian federal government since the Child Care Act of 1972 and the variations in state and local government commitment. The last two sections discuss the pros and cons of some important policy questions, i.e., who shall receive government-supported day care, how federal funds should be allocated to local agencies, what proportion of the cost of child care should be borne by parents and by government, what role should be played by commercial daycares and work-related children's centers, and how the wages and conditions of child care workers can be improved. The report closes with nine recommendations for resolving some of these issues. The Australian Labor Party policy on child care, excerpted from the 1982 platform, is appended. (CB)