The number of children in the care of New South Wales government insti
tutions has been decreasing. The decline has been sharper for those ch
ildren in state institutions compared with those children in state-org
anized foster care. Overall, government expenditure on substitute care
has also fallen, although cash transfers to private child welfare age
ncies for the provision of alternative substitute care have increased
markedly. Plans to transfer remaining state substitute-care services t
o the private sector are accompanied by introduction of greater measur
es of control. Privatization and tighter regulation of substitute-care
services reflect wider trends in the Australian welfare state.