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In common with other advanced market economies, regional and rural communities in Australia have come under increasing economic and social stress. One manifestation of this phenomenon is the growing spatial inequalities in social and economic conditions. This paper briefly reviews the genesis of spatial inequalities and examines their consequences in the contemporary Australian political milieu. The discussion concludes with an analysis of the policy implications of these inequalities for local governments and communities in disadvantaged regional and rural areas. [ABSTRACT FROM AUTHOR]