Australia’s youth rank only fifteenth in the OECD in their levels of post-compulsory schooling retention. Early school leavers are more likely than their counterparts, who complete at least twelve years of schooling, to experience short and long term unemployment, lower average salaries, incarceration in prisons and poor health. In the Queensland context the present investment in The Education and Training Reforms of the Future (State of Queensland, 2002) initiatives is designed to enhance engagement in postcompulsory schooling and further, it is intended to boost social capital resources and contribute to national productivity and innovation. This paper will explore common understandings of the concepts of social and human capital in the knowledge economy and investigate the connections between the two. It will examine how these concepts are embedded in the ETRF and draw some conclusions concerning the validity of the premises upon which its proposals are based. While it may appear that social investment inevitably results in enhancement of human and social capital, this is an assumption yet to be scrutinised.