It is apparent that hospital-dominated health care produces limited health outcomes and is an unsustainable health care system strategy. Community-centred health care has been demonstrated to be a more cost-efficient and cost-effective alternative to hospital-centred care, particularly for prevention and care of persistent, long-term or recurrent conditions. Nevertheless, hospital-centred services continue to dominate health care services in Australia, and some state governments have presided over a retreat from, or even dismantling of, community health services. The reasons for these trends are explored. The future of community health services in Australia is uncertain, and in some states under serious threat. We consider lessons from the partial dismantling of Australian community mental health services, despite a growing body of Australian and international studies finding in their favour. Community-centred health services should be reconceptualised and resourced as the centre of gravity of local, effective and affordable health care services for Australia. A growing international expert consensus suggests that such community-centred health services should be placed in the centre of their communities, closely linked or collocated where possible with primary health care, and functionally integrated with their respective hospital-based services