This article takes a state's eye view of trends towards a more centralised system of governance in Australia. It argues that while globalisation strengthens the roles of national governments it also provides less noticed public policy and management opportunities for sub-national governments. The article shows how state governments in Australia can use high-level policy proposals to reinforce their continuing relevance as key members of a federal system of government. It proposes that skilful deployment of policy ideas and analyses can enable the states to sustain alternative national agendas despite hostility or lack of interest by the federal government. In conclusion, the article examines the implications for federal-state relations under the Rudd government. It suggests that the elements for productive reform agendas are present but that bringing them together will require considerable effort.