This article responds to Thomas's (2004) call for investigation into how the internet and World Wide Web are changing government in Australia. It first discusses e-government principles and policies at the federal level, and then investigates initiatives and events in one of Australia's most populous municipalities, the City of Casey in Melbourne's southeast. The objective of this approach is to understand the broader context of e-government policy formulation in Australia, and connect this to the level of local government in order to understand the features and dynamics of existing e-government mechanisms. The evidence generated from this approach reveals an imbalance between service delivery and civic engagement in e-government strategies, with the emphasis on consumer-oriented service delivery far outweighing civic participation and political dialogue. The analysis that follows outlines actual and potential political problems flowing from this imbalance - or 'digital democratic deficit' - and offers suggestions on how equilibrium might be restored.