The Australian Government's recent decision to replace the Rural Remote and Metropolitan Area (RRMA) classification with the Australian Standard Geographical Classification - Remoteness Areas (ASGC-RA) system highlights the ongoing significance of geographical classifications for rural health policy, particularly in relation to improving the rural health workforce supply. None of the existing classifications, including the government's preferred choice, were designed specifically to guide health resource allocation, and all exhibit strong weaknesses when applied as such. Continuing reliance on these classifications as policy tools will continue to result in inappropriate health program resource distribution. Purely 'geographical' classifications alone cannot capture all relevant aspects of rural health service provision within a single measure. Moreover, because many subjective decisions (such as the choice of algorithm and breakdown of groupings) influence a classification's impact and acceptance from its users, policy-makers need to specify explicitly the purpose and role of their different programs as the basis for developing and implementing appropriate decision tools such as 'rural-urban' classifications. Failure to do so will continue to limit the effectiveness that current rural health support and incentive programs can have in achieving their objective of improving the provision of health care services to rural populations though affirmative action programs.