Primarily developed as an alternative to narrow measures of well-being such as utility and resources, Amartya Sen's capability approach places strong emphasis on people's substantive opportunities. As a broad normative framework, the capability approach has become a valuable tool for understanding and evaluating social arrangements (e.g. education policies and development programmes) in terms of individuals' effective freedoms to achieve valuable beings and doings. This paper explores the recent emergence of "capability" in Australian education policy, specifically in the "Australia in the Asian Century" White Paper. We explore capability as a framing device and reveal how its various meanings are at odds with the scholarly literature, specifically Sen's conception of capability and its implications for social justice in and through education. The analysis shows that the social justice intent of a capability approach appears to be overtaken in the White Paper by an emphasis on outcomes, performance and functionings that seek to serve the nation's economic interests more than the interests of students, especially the disadvantaged.