There have been a number of important developments in Australia in the area of telemedicine. At the national level, the House of Representatives' Standing Committee on Family and Community Affairs has been conducting the Inquiry into Health Information Management and Telemedicine. The Australian Health Ministers' Advisory Council has supported the establishment of a working party convened by the South Australian Health Commission to prepare a detailed report on issues relating to telemedicine. State governments have begun a number of telemedicine projects, including major initiatives in New South Wales and Victoria and the extensive development of telepsychiatry services in Queensland. Research activities in high-speed image transmission have been undertaken by the Australian Computing and Communications Institute and Telstra, and by the Australian Navy. The matter of the funding of both capital and recurrent costs of telemedicine services has not been resolved, and issues of security and privacy of medical information are subjects to discussion. The use of the Internet as a universal communications medium may provide opportunities for the expansion of telemedicine services, particularly in the area of continuing medical education. A need has been recognized for the coordinated evaluation of telemedicine services as cost-benefit considerations are seen to be very important.