Since Federation, Australia has rarely experienced such a dynamic state of change in the structures and methods of government as is occurring in the first decade of the 21st century. Over the last 10 years, the federal government has made strategic extensions into areas of local and regional decision-making that would previously have been unthinkable. State governments have departed from a long history of defensiveness, to promise unprecedented collaboration with other levels of government on policy and services. Local government is set on a course of radical improvement in its policy and service capacities, and its case for more stability, autonomy and resources as part of the national federal system has become undeniable. Will these opportunities for change prove to be short-term 'fads', or can this unprecedented dynamism translate into lasting structural improvement in our federal system of government? This paper argues that the answer depends at least partly on whether current initiatives are extended to include the type of regional political devolution and capacity-building that Australian history demonstrates is sorely needed. The paper suggests three actions as short-term steps for extending the present level of commitment to an improved federal system towards the type of medium-to-long term reform of our system of governance that is almost universally recognised as desirable in city and country regions alike.