Supplemented with 20 tables of data, this discussion focuses on the changing environment of Australian families and society. Specifically offered are descriptions of child care arrangements, a rationale for children's services, and policy suggestions. With respect to child care arrangements, it is noted that the family environment has been altered by a rapid rise in the incidence of divorce, a sharp increase in paid work for mothers in two-parent families, and a shortening of the stage of childbearing. Fewer siblings are in the home due to the drop in fertility. For a majority of families, regardless of their circumstances, the use of some form of child care is a normal part of the weekly routine, with informal arrangements being the most expensive and the most used form of service. While very few families have access to organized child care services, use of preschools and center-based care by those who do differs according to family type. With regard to a rationale for early childhood services, the discussion suggests the importance of such services for children's social development. In particular, this rationale asserts that, since social development is educational, child care is inherently educational. With respect to recommendations for public policy, it is suggested that policies first focus on the nature, level of provision, and organization of children's services and next concern themselves with the relative responsibilities that various levels of government should undertake to ensure development of a comprehensive system. (RH)