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Globalisation and changes in agriculture have resulted in major social changes in inland Australia. Depopulation of the inland has led many to speculate on the future of rural towns and rural people. This paper will examine population drifts from country towns to cities and from the inland to the coastal regions and, in particular, the outmigration of young people. In doing this, the paper focuses on several small towns in central New South Wales that have been the subject of intensive study during 2000 and 2001. Drawing on analysis of Australian Bureau of Statistics figures, in-depth interviews and focus groups with key informants and surveys with young people and their parents in small rural communities the paper will report on the loss of young people and the greater loss of young women from these areas. It is argued that this outmigration of young people is linked to the need to seek higher education and also to the loss of full-time jobs for young people. The loss of these jobs is the result of changes in agricultural production, labour market restructuring and a withdrawal of public and private sector services. It is further argued that current reliance by governments on market based and community self-help solutions is not enough to provide a future for rural communities. Even if economic growth occurs this will not solve the problem of loss of young people, and the greater loss of young women, nor will it address the issue of access to education and training. Rather far greater attention to human capital (access to education, training and employment), institutional capital (government and non-government services and infrastructure) and social capita! (strong networks) is needed if Australia's small rural towns are to survive and flourish. [ABSTRACT FROM AUTHOR]