In light of the recent election of the Rudd Labor government, and the highlighting of social inclusion as a ministerial portfolio and policy direction, this paper considers the relationship between "youth participation" and social inclusion. It argues that the neoliberal social and economic policies of the Howard era resulted in social exclusion for many young people and also limited their capacity to participate. It also asks whether social inclusion is the pathway to creating capacity for young people to participate. Drawing on both the UK experience and the policies of the Rudd government, it flags potential problems with a social inclusion agenda in terms of its ability to increase young people's capacity for participation.