The Commonwealth Government has undertaken major taxation reforms to revitalise the Australian federation, paving the way for new and more robust national responses to sustainable development. These responses need to be firmly based on the concept of subsidiarity where policy development and implementation is undertaken as close as possible to local communities, while not compromising agreed objectives at regional, state and national levels. This note examines the Planning Institute of Australia's proposed model for a national urban policy. This policy calls for the establishment of an Australian Sustainable Development Charter, a Sustainable Development Commission and a contingent funding regime under which the States and Territories will have major financial incentives to create and implement visionary strategies for our cities and regions. In its 'Sustainable Cities' report, released in September 2005, the House of Representatives Committee on Environment and Heritage endorsed the principles of the PIA model.