Broadening the framework of environmental impact assessment (EIA) involves an examination of the principles and policies which should underlie ecologically sustainable development. To work effectively, EIA procedures need to be located within a broad framework of policies and environmental objectives, standards and monitoring. This paper discusses the political and environmental context in Australia within which the debate on sustainable development is occurring. Some important principles which underlie an ecologically sustainable development policy framework are discussed. These include inter-generational equity, conservation of biological diversity and ecological integrity, maintenance of natural capital and a recognition of the biophysical limits on natural resource use. Economic policy needs to emphasise the qualitative aspects of development as opposed to the quantitative growth in resource use. Several key aspects of a broad Australian policy framework are discussed, including reform of Federal/State environmental arrangements and the establishment of a Federal Environment Protection Agency; development of a systematic means of measuring progress towards an ecologically sustainable development; materials, natural resources, energy, waste, transport and urban development policies. The overall objective of these policy areas would be to bring the scale of human activity in Australia within the carrying capacity of the environment.