With the dust barely settled after Labor’s historic election win, the government is wasting no time getting down to business.
As Australians eased into their Sunday morning, key decisions were already underway—signalling what could be the start of a defining term in uncertain times.
Treasurer Jim Chalmers has made it clear: managing the risks of global economic uncertainty is at the very top of Labor’s to-do list.
Before most of us had even finished our morning cuppa, Chalmers was already on the phone with Treasury Secretary Steven Kennedy, getting a 6:45am briefing on the state of the world economy.
The message? Australia is facing a period of heightened global risk, with tensions between the US and China casting a long shadow over financial markets and, by extension, our own economic outlook.
‘We know that the direct impact on us from the [US] tariffs is manageable and relatively modest,’ Chalmers said. ‘But there is a huge downside risk in the global economy. I think what’s happening, particularly between the US and China, does cast a dark shadow over the global economy.’
You might be wondering, ‘What does all this mean for me?’ The answer is: quite a lot. Australia’s economy is deeply connected to the rest of the world, especially when it comes to trade. When global giants like the US and China start rattling sabres over tariffs and trade, the ripple effects can reach all the way to our supermarket shelves, our superannuation balances, and even the value of our homes.
Earlier this year, the International Monetary Fund (IMF) downgraded Australia’s growth forecast for 2025 from 2.1% to 1.6%, citing global uncertainty. If those predictions come true, it could mean $13 billion wiped from our economy. That’s not just a number on a spreadsheet—it could translate to fewer jobs, slower wage growth, and more pressure on household budgets.
Despite the challenges, the government is determined to stay optimistic. Chalmers says Labor is ‘realistic’ about the risks but believes Australia is well-placed to weather the storm.
The government is banking on a mix of strong domestic policies—think renewable energy investment, affordable housing initiatives, and support for local industries—to help buffer the country from global shocks.
Prime Minister Anthony Albanese has also tried to reassure Australians, pointing out that the economy has grown every quarter since Labor took office, even as other advanced economies have stumbled. ‘Our government has presided over growth in every quarter since we’ve been in office. Unlike a lot of the advanced economies around the world,’ he said.
Not everyone is feeling quite so upbeat. The Australian Industry Group has congratulated Labor on its win but warned that businesses are facing the toughest conditions in a generation. ‘Each day sees more global trade disruption, greater market intervention, the building of trade barriers and the risk of global conflict. As a trade-expressed economy, we will not be immune to the consequences of the rapidly changing global landscape,’ the group said in a statement.
In his victory speech on Saturday evening, Albanese acknowledged the global challenges but stated his government would tackle these issues ‘the Australian way’ by ‘looking after each other while building for the future’.
As attention shifts from the election to economic realities, the government’s next steps will play a crucial role in shaping public and business confidence. Time will tell how global headwinds are managed on the national stage.
What do you think about Labor’s priorities? Are you worried about the global economy, or do you feel confident Australia can ride out the storm? Have you noticed any changes in your own finances lately? Share your thoughts and experiences in the comments below—your voice matters!
Also read: From ‘stupid hours’ to iconic moments: ABC election legend signs off for the last time
