The Australian education system is denying equity and social justice to ethnic minorities and women. This paper examines the development of Australia's educational policy for those two groups. It argues that the educational disadvantages they have experienced have been enhanced by the marginalization of the issues. Policies such as multicultural education and non-sexist curricula have failed to redress the imbalance because they moved the focus away from structural inequalities which reproduce the disadvantages of ethnic minorities and women and instead focused upon cultural and attitudinal characteristics of the group themselves. In the current climate of economic recession and increasingly centralized control of curricula in Australia, moves to "mainstream" educational programs for women and ethnic minorities merely represent a shift from marginalization to over-generalization, creating policies intended for "all" students, but which fail to be informed by the different educational experiences and outcomes of the two groups. This report is divided into discussions of the following: (1) state ideology and educational policy in Australia; (2) the structure of the Australian education system; (3) curriculum innovation and the process of marginalization; (4) the bureaucratization process; and (5) from marginalization to mainstream: incorporating ethnicity and gender into all aspects of the schooling process. (PS)