During the last sixty years there have been dramatic changes in the properties of mid-latitude winter storms which have impacted on southern Australian winter rainfall. In particular, there have been large reductions and negative trends in rainfall over this period, associated with similar reductions in the growth rates of storm track modes and a preference for some storms to develop further south of the Australian continent. Here, we consider the changes over the last sixty years in the annual cycle of dynamical modes of variability focusing on mid-latitude storm formation. We also examine the changing properties of other weather systems such as blocking modes, northwest cloud-band disturbances and intraseasonal oscillations that impact on Australian rainfall during southern winter. The changes in the properties of the storms in all seasons are analyzed and related to the large scale atmospheric circulation changes and to their impact on rainfall. We employ a useful diagnostic of storm development related to baroclinic instability, and encapsulated in the Phillips criterion. The relationship between changes in the Phillips criterion and changes in rainfall in all seasons during the twentieth century is discussed. We also consider the extent to which the CMIP3 models are able to simulate the observed changes and trends in storm formation and rainfall, in all seasons. Finally, we consider projected changes and trends in storm formation and rainfall under SRES scenarios using results from the more reliable CMIP3 models. We also elucidate the roles of anthropogenic forcing and internal variability.