Beginning with the progressive government of Gough Whitlam in the early 1970s, Australia has embraced policies of multiculturalism and, more recently, social inclusion. With the conservative government of John Howard in the late 1990s, federal governments have fostered a rapid expansion of religious schools, heavily subsidised by taxpayers. Justifications have included the need to promote 'values' in the school system and the need to increase 'choice' and 'diversity'. The new religious schools' proliferation raises tangled questions of culture, religion, ethnicity and class. The extent to which the schools promote inclusion and foster diversity depends on several factors, including what kind of religion the schools present and how the schools understand their educational and cultural responsibilities in relation to the wider society and the state.