Australian aged care services have undergone a series of substantial r
eforms in recent years under the rubric of the Aged Care Reform Strate
gy. Overall, there has been a progressive refinement of the targeting
of available services on those most in need, defined in terms of both
disability levels and financial resources. A key component of this pro
cess has been a deliberate reduction in the relative emphasis accorded
to nursing home care within the aged care system. This has been accom
panied by increases in the resources directed toward less intensive fo
rms of residential care (hostels) and community based services. This p
aper explores the actual consequences of these intentional policy Chan
ges in terms of the availability of nursing home and hostel care, and
the changing characteristics of nursing home residents. The results su
ggest that a more substantial reduction has occurred in the availabili
ty of nursing home care than has hitherto been suggested, with consequ
ent decreases in the proportion of aged persons in nursing homes, The
effect has been particularly marked amongst women and the very old. Th
ese findings raise policy questions about the appropriateness of curre
nt and planned future levels of provision.