The position adopted in this paper is developed in the context of literature relating to the politics and policies which are transforming Australian school and teacher education. The public education system in Australia has undergone rapid change and restructuring with the goal of national reconstruction and international competitiveness through education. The restructuring has resulted in increased debate on the purposes and priorities of education and brought into question the role teacher education should play in shaping the policy, practice, and outcomes of educational institutions. Economic and management policies have emphasized the efficiencies to be gained, socially and economically, by "synchromeshing" schools with the labor market, emphasizing training in the vocational skills and knowledge sought by industry, and cost-efficiency and accountability in the ethos, practices, and outcomes of educational institutions. The professional literature suggests that in orchestrating the debate on public education, for all intents and purposes, the Federal Government has marginalized teacher educators. The first section of the paper examines the politico-economic context of education policy in Australia. The second section presents a critical analysis of the so-called "neutral" outlook in teaching in the present climate. Finally, the third section considers the active part that teacher educators should play in their own empowerment. The paper concludes that the challenge for teacher educators is to understand the increasing need to become political actors, in terms of influencing the agenda and discourse in education, while at the same time, due recognition must be given to the reality of the present national politico-economic situation within in a global context. (Contains 67 references.) (ND)