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Albanese Backs U.S. Iran Strikes, Warns of Regional Escalation as Australia Urges Citizens to Flee

March 1, 2026

Prime Minister Anthony Albanese on Sunday expressed support for U.S.-led military strikes against Iran, calling the Iranian regime a direct threat to international peace and security while urging Australians in the Middle East to depart immediately.

Speaking in Sydney, Albanese stopped short of committing Australian forces to the operation but defended the strikes as a necessary response to Iran’s nuclear program and its support for armed proxies. He cited at least two IRGC-linked attacks on Australian soil in 2024 — including the firebombing of an Adass synagogue in Melbourne — as evidence of the regime’s global reach.

Key Developments:

• Australia opened a DFAT registration portal for citizens seeking assisted departure from Israel and Iran

• Travel advice upgraded to “do not travel” for Israel, Lebanon, Bahrain, Kuwait, Qatar, and the UAE

• Flight disruptions reported across the region, with Emirates and Etihad services affected by transport hub closures

Australia’s Prior Actions Against Iran:

• Expelled Iran’s ambassador in 2024 — the first expulsion since World War II

• Suspended operations at its Tehran embassy

• Listed the IRGC as a state sponsor of terrorism

• Sanctioned more than 200 Iranian-linked individuals

When pressed on the legality of the strikes, Albanese deferred to the United States and allied nations directly involved, reiterating that Iran’s conduct — including bombing areas of Dubai — represented an escalation “consistent with the nature of the regime.”

Australians requiring consular assistance can contact the Consular Emergency Centre at 1300 555 135 (within Australia) or +61 2 6261 3305 (international), available 24 hours a day.

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Prime Minister Anthony Albanese on Sunday ordered the Department of Foreign Affairs and Trade to open an emergency registration portal for Australians seeking to leave Israel and Iran, as Australia upgraded travel warnings for six countries in the Middle East to “do not travel” amid rapidly escalating military conflict.

The countries affected — Israel, Lebanon, Bahrain, Kuwait, Qatar, and the United Arab Emirates — represent some of the busiest destinations for Australian travellers and expatriates in the region. The “do not travel” designation is DFAT’s most severe advisory level, reserved for situations where the risk of harm to Australians is deemed unacceptably high.

“We have upgraded travel advice for Israel, Lebanon, Bahrain, Kuwait, Qatar and the United Arab Emirates to do not travel,” Albanese said. “Australians should leave now if it is safe to do so.”

The Prime Minister reinforced an existing advisory against travel to Iran that has been in place since 2020, urging any Australians remaining in the country to depart immediately if they can do so safely.

“We continue to advise Australians to not travel to Iran — for since 2020 — and to leave Iran as soon as possible, of course, if it is safe to do so,” he said.

The consular situation in Iran is particularly acute. Australia suspended operations at its Tehran embassy following the IRGC’s orchestration of attacks on Australian soil in 2024, leaving the government with severely limited capacity to assist Australians on the ground.

“Our ability to provide consular assistance in Iran is extremely limited,” Albanese acknowledged.

The Department of Foreign Affairs and Trade opened its registration portal on Sunday morning, with officials committing to directly contact registered Australians with the most current information available. Albanese urged any Australians in the affected countries who had not yet registered to do so immediately.

The logistical challenge of assisting Australians in the region was already materialising on Sunday, with the closure of major transport hubs across the Middle East triggering a wave of flight disruptions and cancellations. Albanese confirmed that aircraft operating for major Gulf carriers had already been forced to return to Australia after being unable to land at their intended destinations.

“We’ve already seen flights returned to Australia that were unable to land in either Dubai or Abu Dhabi,” he said, noting that Emirates and Etihad operate large numbers of flights to the region, as does Qatar Airways and other carriers.

Australians requiring urgent consular assistance were directed to contact the government’s Consular Emergency Centre, which operates 24 hours a day, seven days a week. Within Australia, the emergency number is 1300 555 135. From overseas, Australians can reach the centre at +61 2 6261 3305.

Albanese urged Australians in the region not to wait for government-arranged evacuation but to use commercial flight options where still available and take personal responsibility for their own safety.

“Travellers should prioritise their safety,” he said. “They should monitor events and follow local advice.”

The Prime Minister expressed particular concern for the large number of Australians with family ties across the Middle East — a cohort that spans Lebanese-Australian, Iranian-Australian, Israeli-Australian, and other communities. He estimated tens of thousands of Australians have loved ones directly in the affected area.

“I understand this is a very difficult time for the tens of thousands of Australians with loved ones in the Middle East,” Albanese said. “The days ahead are going to be difficult. They are uncertain. We are deeply concerned and my government’s priority remains the safety of Australians in the region.”

When pressed on what specific repatriation options exist for Australians in Iran — where Australia’s consular presence is now effectively suspended — Albanese said his government would do “all we can” but acknowledged the limitations created by the embassy closure.

“We will continue to engage. We have very swiftly acted to set up the emergency centre, we will always update the information for Australians in the region, and we will continue to monitor this on a daily basis,” he said.

He described the pace of government monitoring as unprecedented in its intensity: “Literally, we are doing this on an hour-by-hour, minute-by-minute basis, because our priority is keeping Australians safe.”

For Australians already in transit or planning to travel to the region for personal or business reasons, the prime minister’s advice was unambiguous: do not proceed, and if already in-country, depart at the earliest safe opportunity.

The Smart Traveller website — operated by DFAT — was identified as the primary source of real-time travel information for Australians.

The travel advisory upgrades represent one of the most sweeping coordinated travel warning escalations Australia has issued in recent memory, covering nations that host tens of thousands of Australian residents, workers, and visitors on any given day.

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Prime Minister Anthony Albanese on Sunday threw Australia’s full diplomatic weight behind U.S.-led military strikes on Iran, condemning the Islamic Revolutionary Guard Corps as a sponsor of state terror and signaling that Canberra would not mourn the death of a senior Iranian regime figure whose passing he said went without grief from his government.

Speaking at an emergency press conference in Sydney, Albanese described the Iranian regime as a direct and documented threat to Australian soil, citing attacks orchestrated by the IRGC on Australian territory in 2024, including the firebombing of a Melbourne synagogue. His statement placed Australia among the coalition of Western nations tacitly or explicitly endorsing the military operation against Tehran.

“We support the United States acting to prevent Iran from obtaining a nuclear weapon and to prevent Iran from continuing to threaten international peace and security,” Albanese said.

The Prime Minister stopped short of confirming direct Australian military participation, stating that Australia was “not directly active in the current military strikes,” but left no doubt about his government’s position on the legitimacy of the operation.

The remarks came as Iran retaliated by bombing areas of Dubai, a move Albanese condemned in unequivocal terms.

“Iran has made the decision to take aggressive action and bomb areas of Dubai that have no role in any of this military action whatsoever,” he said. “This is an aggression and an escalation by Iran that is consistent with the nature of the regime.”

Albanese referenced the death of a senior Iranian leadership figure — identified in the transcript as associated with Iran’s ballistic missile and nuclear programs, its support for armed proxies, and brutal domestic repression — stating his passing “will not be mourned.” The Prime Minister said this figure had been responsible for orchestrating attacks on Australian soil.

On questions of legality, Albanese deferred to the United States and other direct participants in the strikes, but argued Iran’s documented threat to international peace and security spoke for itself.

“The threat to international peace and security of the Iranian regime is real,” he said. “The fact that they orchestrated attacks here in Australia, on the other side of the world, underlines the threat that this regime presented to the rule of law and to international norms of behaviour.”

When asked whether he had spoken with U.S. President Donald Trump or Israeli Prime Minister Benjamin Netanyahu, Albanese confirmed his government was “in contact with the United States over all of these issues” but did not confirm direct leader-to-leader communication.

Australia’s support, while stopping short of military involvement, reflects a significant alignment with Washington. The Albanese government has in recent years expanded its AUKUS commitments and deepened defence ties with the United States and the United Kingdom, making the prime minister’s statement consistent with a broader strategic posture in the Indo-Pacific.

Asked whether Australia would support a protracted military campaign or preferred a swift, narrow operation, Albanese was measured.

“Australia always supports diplomatic action where possible and we hope that the actions that have been taken lead to a swift resolution,” he said.

The Prime Minister framed Australia’s position as one of consistent principle rather than reactive opportunism, pointing to a series of extraordinary diplomatic steps his government had already taken against Tehran — expelling Iran’s ambassador, suspending the Australian embassy in Tehran, designating the IRGC as a terrorist organisation, and sanctioning more than 200 Iranian-linked individuals.

He expressed solidarity with Iranians who had risked their lives protesting against the regime, referencing brutal IRGC crackdowns on domestic dissent in which thousands were killed or imprisoned.

“This is a regime that we hope that the Iranian people are able to determine their own destiny,” Albanese said. “At the moment, that is clearly not the case.”

The Prime Minister also acknowledged the position of Australia’s Iranian-Australian community of approximately 50,000 people, recognising the anxiety many feel for relatives and friends inside Iran during the rapidly evolving crisis.

“I understand this is a very difficult time for the tens of thousands of Australians with loved ones in the Middle East,” he said. “The days ahead are going to be difficult. They are uncertain.”

Albanese declined to define any explicit red line for the extent of Australian support, instead indicating his government would monitor the situation hour by hour.

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Australian Prime Minister Anthony Albanese declared unequivocal support Saturday for the United States-led joint military campaign against Iran, as explosions tore through Tehran, Iranian missiles struck American bases across the Gulf, and the conflict rapidly escalated into the most significant military confrontation the Middle East has seen in decades.

“Australia stands with the brave people of Iran in their struggle against oppression,” Albanese said in a statement posted to social media, backing US President Donald Trump’s vow to crush Iran’s military capability and eliminate its nuclear programme. “A regime that relies on the repression and murder of its own people to retain power is without legitimacy.”

The Prime Minister’s statement came as smoke rose above Tehran’s presidential district, sirens wailed over Jerusalem, and Iran’s Islamic Revolutionary Guard Corps fired retaliatory missiles at US military bases in Bahrain, Kuwait, the United Arab Emirates and Qatar. One person was killed by shrapnel from an Iranian missile in the UAE, according to that country’s defence ministry.

Trump, announcing what he called “major combat operations,” said the campaign’s objective was to “defend the American people by eliminating imminent threats from the Iranian regime.” Israeli Prime Minister Benjamin Netanyahu framed the joint operation as one that could “create the conditions for the brave Iranian people to take their destiny into their own hands.”

Australia’s Department of Foreign Affairs and Trade activated its Crisis Centre and issued emergency directives urging all Australians in Iran, Israel and Lebanon to leave immediately. The government also upgraded travel advice for Israel and Lebanon to its highest level — “Do Not Travel.”

ALBANESE CITES ATTACKS ON AUSTRALIAN SOIL

Saturday’s statement from Albanese offered the most comprehensive public account yet of Australia’s deteriorating relationship with Tehran and the domestic security events that preceded Canberra’s alignment with the US-Israel campaign.

The Prime Minister revealed that Iran directed at least two attacks on Australian soil in 2024, targeting the country’s Jewish community in acts he described as designed to “create fear, divide our society and challenge our sovereignty.” In response, Australia took what Albanese called “unprecedented steps” — expelling Iran’s Ambassador, suspending embassy operations in Tehran and formally listing the Islamic Revolutionary Guard Corps as a state sponsor of terrorism.

The government has since sanctioned more than 200 Iranian-linked individuals, including more than 100 with direct ties to the IRGC. Albanese said Australia had repeatedly called on Iran, alongside the United States and G7 partners, to uphold the human rights and fundamental freedoms of its citizens. “These calls have gone unheeded,” he said. “Instead, the regime has instigated a brutal crackdown on its own people, leaving thousands of Iranian civilians dead.”

Courtesy by @realDonaldTrump

NUCLEAR PROGRAMME AT THE HEART OF THE CRISIS

Central to both Albanese’s statement and the broader justification for Saturday’s military campaign is Iran’s nuclear programme, which the Prime Minister described as “a threat to global peace and security.” The United Nations Security Council has reimposed sanctions on Iran for failing to comply with the Joint Comprehensive Plan of Action. The International Atomic Energy Agency Board has formally declared Iran in non-compliance with its non-proliferation safeguards obligations.

An Israeli military official, briefing journalists Saturday, said Israel had identified a “sharp acceleration” in Iran’s missile production and renewed momentum in its nuclear programme. “They are developing dozens of ballistic missiles each month, and their pace of production is getting faster and faster,” the official said, describing a “dramatic expansion of an already dangerous arsenal.”

The strikes came just 24 hours after nuclear talks between Washington and Tehran collapsed without a deal. Trump, who had said publicly he was “not happy” with the progress of discussions, launched the military operation while a further round of negotiations had been tentatively scheduled for the following week. Guardian diplomatic editor Patrick Wintour noted the operation’s timing was nearly identical to a US-backed Israeli strike last June — launched three days before a sixth round of Iran-US talks — raising questions about Washington’s commitment to diplomacy.

Albanese said Australia “supports the United States acting to prevent Iran from obtaining a nuclear weapon and to prevent Iran continuing to threaten international peace and security.”

TEHRAN STRIKES: WHAT IS KNOWN

Explosions shook multiple districts of Tehran from the early hours of Saturday morning, with journalists from Agence France-Presse reporting loud blasts and columns of smoke rising across the city. Videos circulating on Iranian Telegram channels appeared to document strikes in Kermanshah near the Iraqi border, in Bushehr on the Persian Gulf, on an IRGC base near Mount Damavand, and on the Parchin military complex, which is alleged to produce chemical weapons.

Iran’s Supreme National Security Council issued a statement urging citizens to leave Tehran and major cities, advising the public to “travel to other centres and cities if possible to stay safe.” Schools and universities were closed until further notice. Banks remained open. Government offices were operating at 50 per cent capacity.

Iran’s supreme leader, Ayatollah Ali Khamenei, and President Masoud Pezeshkian were reported to have been among the targets of the strikes, according to Israeli officials. Khamenei is believed to have been evacuated from Tehran to a secure location. Iranian state media reported that Pezeshkian is “in full health.” Israel mobilised 70,000 reservists and deployed troops to its borders as the operation unfolded, with Israeli air defence systems working to intercept what the IDF described as a “barrage of missiles” launched from Iran toward Jerusalem and other population centres. Residents were evacuated from buildings struck by projectiles in Haifa, and Israelis took shelter in underground car parks across Tel Aviv.

IRAN STRIKES BACK ACROSS THE GULF

Iran’s IRGC confirmed it had launched missiles against US military bases across the Gulf in direct retaliation for the joint US-Israel assault. Explosions were reported near the US Navy’s Fifth Fleet headquarters in Bahrain, prompting Bahraini authorities to begin evacuating residents from the Juffair area south-east of Manama. Explosions were also reported in Kuwait, the UAE and Qatar.

The British Foreign Office issued an urgent directive to nationals across the Gulf: “British nationals in Bahrain, Kuwait, Qatar and United Arab Emirates should immediately shelter in place. Remain indoors in a secure location, avoid all travel and follow instructions from the local authorities.”

Gulf states moved quickly to close their airspace, triggering an immediate and widening collapse of international aviation across the region.

GLOBAL AVIATION NETWORK IN FREEFALL

The airspace closures set off a cascading disruption across the world’s busiest long-haul corridors, grounding flights between Europe, Asia, Australia and destinations throughout the Middle East. Among the carriers to cancel or suspend services: British Airways halted flights to Tel Aviv and Bahrain until March 3 and cancelled Saturday’s service to Amman; Lufthansa suspended services to Tel Aviv, Beirut and Oman until March 7 and pulled Dubai flights for the weekend; Qatar Airways suspended all flights in and out of Doha following the closure of Qatari airspace; Turkish Airlines cancelled services to Qatar, Kuwait, Bahrain, the UAE and Oman immediately and suspended flights to Lebanon, Syria, Iraq, Iran and Jordan until March 2; Wizz Air halted flights to Israel, Dubai, Abu Dhabi and Amman until March 7.

Norwegian Air, Virgin Atlantic, Air France, Aegean Airlines, Japan Airlines and Iberia Express also cancelled or suspended regional services. Heathrow Airport advised passengers to check directly with airlines, citing cancellations and delays “due to the ongoing situation in the Middle East and resulting airspace closures.”

Albanese’s DFAT urged all Australians — including those with no connection to the Middle East — to contact their airline or travel agent immediately to confirm flight status. Most standard Australian travel insurance policies provide no coverage for travel to Iran. The government specifically directed travellers to review their policies for provisions relating to flight cancellations, delays and changes in advisory levels.

DUAL NATIONALS FACE ACUTE DETENTION RISK

For Australians holding dual Iranian-Australian citizenship, Saturday’s escalation has created a situation of acute legal and personal danger. Iran does not recognise dual nationality, meaning Australian-Iranian citizens detained during the conflict may receive no formal consular access. The Australian Embassy in Tehran — suspended as part of the diplomatic measures Albanese outlined — has removed what was already a constrained safety net.

Dual nationals holding Iranian passports are required under Iranian law to exit the country on their Iranian travel document. Security forces’ response to protests has historically been severe, with documented injuries, deaths and mass detentions. The advisory urged all Australians in Iran to avoid public gatherings, demonstrations and crowds without exception, and to shelter in place with adequate supplies of water, food and medication if departure is not immediately safe.

DFAT acknowledged that in some previous cases, the Australian Government was not notified when a citizen was taken into custody in Iran — and that under current conditions, the capacity to intervene remains severely limited.

CONSULAR EMERGENCY CONTACTS

The Department of Foreign Affairs and Trade has activated its Crisis Centre to support Australians across the region.

Within Australia: 1300 555 135 International: +61 2 6261 3305 Available 24 hours, 7 days

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Australia’s unemployment rate held steady at 4.1 per cent in January, official government data showed Thursday, masking a sharp rise in youth underemployment and a broad decline in part-time work that complicated an otherwise stable headline result.

The Australian Bureau of Statistics released its Labour Force report for January 2026, revealing that while the economy added 18,000 jobs during the month, the gains were uneven — and warning signs beneath the surface suggested the labour market remains under pressure in key areas.

Full-Time Gains Offset by Part-Time Losses

Total employment rose by 18,000 people in January, driven by a significant increase in full-time work. Full-time employment climbed by 50,000 — a strong result by recent standards. However, the figure was substantially offset by a fall of 33,000 part-time workers, narrowing net employment growth for the month.

Sean Crick, ABS Head of Labour Statistics, confirmed the headline unemployment rate “remained steady at 4.1 per cent in January,” adding that the composition of job gains reflected a shift away from flexible employment arrangements.

The participation rate fell to 66.7 per cent — down 0.6 percentage points from the record high recorded in January 2025 — indicating that fewer Australians were actively engaged in the labour force compared with the same time last year

.

Youth Underemployment Wipes Out Recent Progress

Among the report’s most closely watched indicators, youth underemployment rose sharply — jumping a full percentage point to 14.8 per cent in January, reversing gains made in the previous month.

Crick acknowledged the reversal directly, stating the rise “largely reversed the fall recorded last month,” effectively returning youth underemployment to levels seen before December’s improvement.

The broader underemployment rate also climbed, rising 0.2 percentage points to 5.9 per cent. The underutilisation rate — which combines unemployment and underemployment — increased by the same margin to reach 10.0 per cent, reflecting growing pressure on workers seeking additional hours or more stable employment.

Hours Worked Rise More Than Employment

Despite the mixed jobs picture, total hours worked posted a stronger-than-expected increase of 0.6 per cent in January — outpacing overall employment growth for the month.

Crick attributed the divergence to seasonal factors, noting that “fewer people reported working less hours than typical Januarys due to being on leave,” which contributed to hours growing more strongly than headcount figures alone would suggest.

Full-time hours worked rose 0.7 per cent, while part-time hours worked increased by a more modest 0.1 per cent. Crick noted that while part-time workers individually logged more hours on average — with part-time hours per person rising 0.8 per cent — the overall pool of part-time workers shrank, limiting the total contribution from that segment of the workforce.

Trend Data Points to Gradual Improvement

On a trend basis, the picture was more encouraging. The trend unemployment rate fell from 4.2 per cent in December to 4.1 per cent in January — continuing a downward trajectory that has now extended across four consecutive months of declining unemployed persons.

Trend employment and hours worked each grew by 0.2 per cent in January. On an annual basis, hours worked grew faster than employment, suggesting that existing workers are absorbing more productive output even as hiring remains measured.

Outlook

The January figures cover the survey reference period of January 4 to 17, 2026. The ABS will next release February Labour Force data covering the period February 1 to 14, 2026.

Analysts and policymakers are expected to monitor youth underemployment and part-time work trends closely in the coming months, particularly as broader cost-of-living pressures continue to weigh on household budgets and workforce participation decisions across the country.

All data is sourced from the Australian Bureau of Statistics Labour Force, Australia, January 2026 report, released February 19, 2026.

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The ABS Labour Force report for January 2026 presents a mixed picture of the Australian jobs market. While headline unemployment held steady and full-time employment rose by 50,000, a simultaneous loss of 33,000 part-time positions tempered overall employment growth to just 18,000 for the month.

Key Details:

• Unemployment rate steady at 4.1% (seasonally adjusted)

• Full-time employment up 50,000; part-time employment down 33,000

• Net employment growth of 18,000 for January

• Participation rate fell to 66.7% — down 0.6 percentage points from January 2025’s record high

• Underemployment rate rose 0.2 points to 5.9%

• Underutilisation rate climbed 0.2 points to 10.0%

• Youth underemployment jumped 1.0 percentage point to 14.8%

• Total hours worked rose 0.6% — outpacing employment growth

Trend Indicators:

• Trend unemployment fell from 4.2% in December to 4.1% in January

• Unemployed persons decreased for the fourth consecutive month

• Trend hours worked grew faster than employment on an annual basis

ABS Commentary: Sean Crick, ABS Head of Labour Statistics, noted the youth underemployment rise “largely reversed the fall recorded last month,” flagging the reversal as a key concern within an otherwise stable headline result. Crick attributed stronger hours growth to fewer workers taking seasonal leave compared with typical Januarys.

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Australian wages rose 0.8% in the December quarter and 3.4% over the year, official data showed Wednesday, as Treasurer Jim Chalmers used the result to draw a sharp contrast with the previous government — and take a thinly veiled shot at his sharpest economic critic.

The Australian Bureau of Statistics released the Wage Price Index figures for the December quarter 2025, showing steady quarterly growth that matched the September quarter result. Annual growth ticked up from 3.3% the prior quarter.

“Quarterly wage growth of 0.8 per cent was in line with the September quarter 2025,” said Michelle Marquardt, ABS head of prices statistics. “Annual growth in wages was 3.4 per cent, up from 3.3 per cent in September quarter 2025.”

Speaking in Logan, Queensland, Chalmers seized on the data to highlight what he framed as a defining difference between Labor and the Coalition era.

“14 quarters in a row where we’ve seen wages growth north of 3% — that didn’t happen once in annual terms in the 35 quarters of our predecessors,” Chalmers said. “That’s the difference, really.”

Public Sector Leading the Charge

Public sector wages led annual gains, growing 4.0% in the year to December 2025 — up sharply from 2.8% at the same time in 2024. Private sector wages grew 3.4% over the same period.

Marquardt attributed the public sector surge to new state agreements that delivered multiple rounds of pay rises in 2025. “Multiple pay rises occurred when agreements included backdated increases that took effect soon after the agreement was finalised, and a further scheduled rise was received later in the year,” she said.

In the December quarter itself, both sectors grew at an identical 0.8%. Healthcare and social assistance was the biggest contributor across public and private for the quarter, driven by Commonwealth-funded aged care and early childhood education pay rises in the private sector, and enterprise agreement increases for frontline NSW health workers in the public sector.

The Real Wages Wrinkle

The headline numbers carry a catch. With inflation running higher than the Reserve Bank would like, real wages — the purchasing power workers actually feel — have been eroded despite nominal growth.

Chalmers acknowledged the tension directly. “With inflation higher than we’d like, that has implications for the real wages calculation,” he said, adding that Reserve Bank forecasts point to inflation peaking around mid-year before easing.

The unwinding of Commonwealth energy bill rebates is expected to push headline inflation figures higher in coming months before they moderate — a complicating factor the government will need to navigate heading into the May budget.

Chalmers vs. Lowe

The press conference turned pointed when reporters raised comments from former Reserve Bank Governor Philip Lowe, who told the Australian Financial Review that the government’s economic management had contributed to inflation, low wage growth, and high interest rates.

Chalmers chose his words carefully — but not without a sting.

“Phil Lowe would have liked to have been reappointed by the government. After he wasn’t reappointed, he’s become a fairly persistent critic of the Labor government in the pages of the Financial Review and elsewhere,” Chalmers said. “I think to some extent that’s just human nature.”

He defended the government’s fiscal record point by point. Spending as a share of the economy has fallen from close to a third under Lowe’s tenure to nearer a quarter, Chalmers said, with real spending growth dropping from an average of 4.1% to 1.7%. The government has delivered two budget surpluses, found $114 billion in savings — including $20 billion in December — and cut income taxes for 14 million Australians.

When asked whether he agreed with Prime Minister Anthony Albanese’s characterisation of Lowe as a former official who keeps appearing in the press, Chalmers was blunt. “He’s the former Reserve Bank Governor and he’s got his name in the paper today. I don’t have any issue with what the Prime Minister said.”

What It Means

For younger Australians — the cohort bearing the heaviest load from high rents, elevated mortgage repayments, and rising grocery bills — the data is a mixed picture. Nominal wages are growing, but real purchasing power remains under pressure until inflation returns to target.

Chalmers framed strong wages as part of the solution to cost-of-living pressures, not a driver of them. “Strong and sustainable wages growth is a really important part of our efforts to lift living standards over time,” he said.

With unemployment at 4.1% and the May budget now firmly in preparation, the government’s ability to sustain that argument will depend heavily on whether inflation tracks down in the second half of 2026 — and whether real wages can recover meaningful ground before voters head to the polls.

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Australian wages grew 0.8% in the December quarter 2025 and 3.4% over the year, according to seasonally adjusted data released Wednesday by the Australian Bureau of Statistics.

The Wage Price Index report showed public sector wages rising at an annual rate of 4.0%, outpacing private sector growth of 3.4% for the fourth consecutive quarter. ABS Head of Prices Statistics Michelle Marquardt attributed the stronger public sector result to new state enterprise agreements delivering multiple pay rises throughout the year, including backdated increases applied shortly after agreements were finalised.

Healthcare and social assistance was the top-contributing industry for the quarter across both sectors, driven by Commonwealth-funded wage increases in aged care and early childhood education, as well as scheduled enterprise agreement rises for frontline health workers in New South Wales.

Private sector annual wage growth edged up to 3.4% from 3.3% recorded in the year to December 2024.

The ABS noted the Wage Price Index is designed to measure pure price change in wages and salaries, independent of workforce composition or changes in the quality or quantity of work performed.

Source: Australian Bureau of Statistics, Wage Price Index, Australia, December Quarter 2025. Released Feb. 18, 2026.

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The Coalition's new economic team — Shadow Treasurer Tim Wilson, Deputy Leader Senator Jane Hume, and Shadow Finance Minister Senator Claire Chandler — used their first press conference on 17 February 2026 to declare the Albanese Government responsible for rising prices, energy bills, and home ownership being "out of reach."

THE HEADLINES FROM THE ECONOMIC TEAM

Tim Wilson, appointed Shadow Treasurer at Tuesday's press conference, made cost of living the centrepiece of the Coalition's pitch. Wilson — who won back the Melbourne seat of Goldstein from independent Zoe Daniel at the 2025 federal election — declared: "The only pathway forward for achieving economic hope in Australia is a change of government."

Senator Jane Hume, Deputy Liberal Leader and Shadow Minister for Employment, Industrial Relations, Productivity and Deregulation, emphasised that wages cannot rise sustainably without productivity gains. "Without productivity we simply cannot have rising wages without inflation," she said.

Senator Claire Chandler, the new Shadow Finance Minister, attacked what she
called Labor's near-"trillion-dollar debt bomb" — characterising the Albanese
Government as having "completely abandoned any discipline" on spending.

She framed herself as a "small government" fiscal conservative.


WHAT IS A SHADOW TREASURER? (EXPLAINED SIMPLY)

Australia's opposition mirrors the Government's structure with its own team of critics called the Shadow Ministry. The Shadow Treasurer is the opposition's main economic spokesperson. Their job is not to run the budget — they don't have that power in opposition — but to hold the actual Treasurer (currently Jim Chalmers, Labor) to account, propose alternative policies, and campaign to take the job at the next election.


WHAT THE COALITION IS PROMISING VS WHAT LABOR SAYS

Taylor and his team attacked Labor on: higher taxes (including what they called taxes on homes and superannuation), rising energy bills, record government debt, immigration pressure on housing and infrastructure, and public sector wage growth outpacing private sector growth


THE HOUSING ANGLE — DIRECTLY RELEVANT TO YOU

Taylor directly acknowledged: "Home ownership and the prospect of home ownership needs to again become a centrepiece of the Australian dream. That is not how younger Australians see it right now."

Shadow Minister for Housing Senator Andrew Bragg has been tasked with "unblocking supply, speeding up approvals and demolishing the barriers to stop homes from being built." He also takes on the Environment portfolio.


THE ENERGY BILL FIGHT

Dan Tehan continues as Shadow Minister for Energy and Emissions Reduction. Taylor's framing: "Energy is the economy. We can't rebuild manufacturing without cheaper,more reliable power and families need relief from rising bills."

The Coalition referred to Labor's net zero policy as a "tax on Australian
manufacturing" driving investment and jobs offshore. This is a contested political characterisation — energy economists and industry groups hold a range of views on the costs and benefits of net zero policies.


WHAT HAPPENS NEXT

The Coalition's Policy Development Task Force — co-chaired by Simon Kennedy and Zoe McKenzie — will develop the economic platform for the next federal election, due by May 2028. Tim Wilson said he expected to demonstrate policy direction "not just in words but deeds and campaigns" over the next two years.

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The Leader of the Australian Opposition has announced a restructured Coalition front bench, reuniting the Liberal and National parties under a single parliamentary team and signalling a sharpened electoral strategy ahead of the next federal election.

The new shadow ministry centres on economic accountability and national security, with the opposition leader framing the reshuffle as a direct challenge to what he described as “the worst government in our nation’s history.”

Key Appointments:

• Senator Jane Hu — Deputy Leader; Shadow Minister for Employment, Industrial Relations, Productivity and Deregulation

• Tim Wilson — Shadow Treasurer, tasked with pursuing lower taxes and reduced inflation

• Senator Jacinta Price — Shadow Minister for Small Business and Skills and Training

• Senator Claire Chandler — Shadow Minister for Finance, Government Services and the Public Service

• Andrew Hastie — Shadow Minister for Industry and Sovereign Capability; Deputy Leader in the House of Representatives

• Aaron Violi — Shadow Minister for Digital Economy, Science, Technology, Innovation and Cyber Security

• Senator Michaelia Cash — Shadow Attorney-General; Opposition Leader in the Senate

• Senator John O’Dunoghue — Shadow Minister for Home Affairs and Immigration

Coalition Position: The opposition leader cited rising living costs, energy prices, housing affordability, and border security as the defining issues the new team will prosecute against the Labor government. The reunification of the National Party was confirmed as endorsed by the Liberal Party leadership.

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The Liberal Party positioned home ownership as its centerpiece issue under new leader Angus Taylor, who says "young Australians deserve the stability and opportunity to own a home" in a direct pitch to priced-out buyers.

If you can’t afford to buy a home, Australia’s conservative opposition wants you to know they’re now making that their problem to solve.

Angus Taylor, sworn in as Liberal Party leader on February 13, 2026, made housing affordability his first major policy commitment - signaling a shift in conservative priorities toward younger voters facing a brutal property market.

“We’ll re-establish home ownership as the centerpiece of the Australian dream,” Taylor said in his inaugural press conference at Parliament House. “All Australians, especially young Australians, deserve the stability and the opportunity to own a home.”

Why this matters to you

Australia’s housing crisis has intensified over the past decade. Median house prices in major cities have soared while wage growth stagnated. Many millennials and Gen Z buyers have been entirely locked out of the market, forced into long-term renting or living with parents well into their 30s.

For young Australians, this represents a fundamental break from previous generations who could reasonably expect to buy a home by their late 20s or early 30s.

What the Liberal Party hasn’t specified yet

Taylor’s press conference was long on commitment but short on details. He didn’t outline:

• Specific policies to increase housing supply

• Whether they’d restrict foreign buyers or investment properties

• Tax incentives for first-home buyers

• Infrastructure plans to open up new housing areas

• Any timeline for when these policies would be released

What is the Liberal Party?

Australia’s center-right major party, currently in opposition after losing badly in the 2025 election. The party traditionally favors free markets and lower taxes but is now under pressure to show it cares about issues affecting younger Australians - a demographic that has trended away from conservative parties.

The housing crisis by numbers

While Taylor didn’t cite specific statistics in his speech, the housing situation he’s responding to is severe:

• Homeownership rates for Australians under 35 have fallen dramatically from previous generations

• Rent now consumes 30-50% of income for many younger workers

• Waiting times for public housing stretch into years in major cities

(Note: These are general trends - the transcript doesn’t include specific data, and we can’t verify current exact figures without additional sources.)

The political calculation

Taylor’s housing focus represents a strategic choice. He’s competing with:

Labor (current government): Already has housing policies in place, though Taylor argues they’re failing

The Greens: Have pushed aggressive policies like rent caps and massive social housing expansion, appealing to younger renters

One Nation: A right-wing populist party that’s been gaining conservative voters on immigration and cost-of-living issues

By leading with housing, Taylor is trying to show the Liberal Party cares about issues that directly affect young people’s daily lives - not just traditional conservative concerns like defence or economic management.

What comes with the housing promise

Taylor packaged housing with related economic commitments:

• Lower taxes overall (”The Liberal Party must always be the party of lower taxes”)

• Fighting any new taxes on homes or superannuation (retirement savings)

• Reducing childcare costs through more “choice and flexibility” (possibly subsidizing nannies or at-home care, though unspecified)

• Lowering energy costs by scrapping what he called “carbon taxes”

The credibility problem

There’s an awkward fact Taylor had to confront: he was shadow treasurer when the Liberal Party made what he now admits were “big calls wrong” on tax policy during the 2025 election campaign.

That loss left the party with just 30 of 151 parliamentary seats - its worst position since formation in 1944.

Now he’s asking voters, including young would-be homebuyers, to trust that things will be different under his leadership.

What happens next

Taylor needs to follow through with actual policy. The housing commitment is currently a priority statement, not a plan.

Parliament returns from summer break on February 17, 2026. The next federal election must happen by May 2028, giving Taylor roughly two years to prove his housing focus is genuine before voters decide.

Opposition parties can make promises, but they can’t implement policy until they win government. For now, this is about signaling what the Liberal Party would prioritize if elected - and trying to win back voters who’ve given up on conservative politics caring about their financial future.

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Angus Taylor told supporters the Liberal Party "may not exist" if an election was held today, describing the conservative opposition as being in its "worst position since 1944" in a brutally honest first speech as leader.

Australia’s main conservative party got a blunt reality check from its new boss.

Angus Taylor, 56, was elected Liberal Party leader on February 13, 2026, replacing Susan Lee who led the party through a devastating election loss eight months ago. In his first press conference, Taylor didn’t sugarcoat the situation.

“If an election was held today, our party may not exist by the end of it,” Taylor said at Parliament House in Canberra.

What is the Liberal Party?

The Liberal Party of Australia is the country’s center-right major party, similar to Republicans in the US or Conservatives in the UK. Founded in 1944, it traditionally governs in coalition with the rural-focused National Party. The party currently holds 30 seats in the 151-seat House of Representatives - its worst result in decades.

“We stopped listening”

Taylor’s diagnosis was harsh. He said the party lost its way by abandoning core values, ignoring voters, and choosing “politics of convenience rather than focusing on the politics of conviction.”

“This ends today,” he repeated twice for emphasis.

The admission is striking because Taylor himself was shadow treasurer during the policies he’s now criticizing. He was part of the team that opposed Labor’s tax cuts for middle-income workers in the 2025 election - a decision that became a major campaign liability.

What Taylor promises will change

The new leader outlined several priorities that directly affect young Australians:

Housing: “Re-establish home ownership as the centerpiece of the Australian dream.” Taylor positioned affordable housing as the #1 issue, acknowledging that “so many Australians can’t afford to buy a home.”

Immigration: Tease a “values-based” immigration policy that would screen arrivals based on whether they “subscribe to our core beliefs.” Details remain vague on how this would work in practice.

Taxes: Pledged the party would “ferociously fight” any new taxes on homes, superannuation (Australia’s retirement savings system), or what he called “taxes on our children’s future.”

Energy: Promised to scrap what he called Labor’s “carbon taxes” on vehicles, electricity, and manufacturing.

Economy: Rejected calls from some conservatives for more government intervention, instead backing “economic freedom” through lower regulation and taxes.

The political reality

Taylor faces serious obstacles. His party is historically weak in parliament. One Nation, a right-wing populist party, is eating into the Liberal vote. And he’s trying to convince Australians to trust him after admitting his team “got some big calls wrong.”

Jane Hume, elected as deputy leader, also used the press conference to apologize for recent comments linking the Chinese diaspora to espionage concerns, calling them “ill-considered” and “out of line.”

What happens next

Taylor will release detailed immigration policy “soon,” according to the press conference. He faces his first major test in Parliament on February 17 when the government returns from summer break.

The next federal election must be held by May 2028, but Prime Minister Anthony Albanese could call one earlier if he senses Liberal weakness continues.

Taylor’s message to his own supporters: “Many of our supporters are angry. They wanted to see change at the last election and they didn’t see the change that they wanted.”

His promise: Things will be different now. His challenge: Proving it before voters decide the party’s survival.

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Sussan Ley's decision to quit Parliament will force a special election in her rural NSW seat — and if Liberals lose it, their ability to block Labor's agenda gets weaker.

The political fallout from Sussan Ley’s leadership loss extends beyond Canberra’s party room drama. Her announcement that she’ll resign from Parliament entirely means voters in Farrah, a sprawling rural electorate in western New South Wales, will head back to the polls in a by-election that could shift the balance of power.

What Just Happened

After losing the Liberal leadership ballot Friday, Ley announced she won’t just step down as party leader — she’s leaving Parliament completely after 25 years representing Farrah.

“I will be spending the next couple of weeks thanking the amazing people of Farrah and expressing my gratitude to them for the honour of representing them for 25 years,” Ley said. “Shortly thereafter, I will be tendering my resignation to the Speaker.”

When she resigns, it triggers an automatic by-election in Farrah. These special elections let voters choose a new MP to fill the vacant seat for the rest of the current parliamentary term.

Why This Matters

For young voters in Farrah: You’ll be voting again sooner than expected, and this is your chance to signal whether you want a Liberal representative to continue in this seat or try something different.

For parliamentary math: Liberals currently hold a certain number of seats in Parliament. Losing Farrah would mean one fewer MP voting on laws and policies. While they’re already in opposition, every seat matters for their ability to negotiate, block legislation, or win future votes.

For political momentum: By-elections often signal broader voter mood. If Liberals can’t hold Farrah — a seat they’ve won for decades — it suggests the party’s troubles go deeper than just leadership chaos.

What Is a By-Election?

A by-election is a special vote held between regular elections when a seat becomes vacant — usually because an MP resigns, dies, or is disqualified. Everyone in that electorate votes to choose a new representative.

By-elections happen more quickly than general elections and often become referendums on the current government or opposition party. They can shift the total number of seats each party holds in Parliament.

The Seat of Farrah

Farrah covers the western plains of New South Wales, including the Murray and Murrumbidgee river regions — vast farming communities far from Sydney’s urban centers.

Ley first won the seat in 2001 by just 206 votes and has been re-elected nine times since. She described it as representing “the western plains of New South Wales, the Murray and Murrumbidgee rivers and the rural communities that it has been my enormous privilege to represent.”

The electorate typically leans conservative, but Ley’s long personal connection to the region means it’s unclear whether voters will stick with the Liberal Party or consider alternatives now that she’s gone.

The Timeline

2001: Sussan Ley wins Farrah by 206 votes, beginning a 25-year career

2001-2024: Re-elected nine times, becoming the region’s longest-serving representative

May 2024: Becomes Liberal Party leader while still holding Farrah seat

Today: Loses leadership, announces resignation from Parliament

Next few weeks: Ley thanks constituents, formally resigns to Speaker

Likely late February/early March: By-election date set and campaigning begins

Estimated 4-6 weeks later: By-election held, new MP sworn in

What Could Happen

Scenario 1 — Liberals hold the seat: The party nominates a strong local candidate who convinces voters to stick with Liberal representation despite the leadership chaos. This would limit the damage from Ley’s departure.

Scenario 2 — Labor wins: If voters blame the Liberal Party for leadership instability or want to send a message, Labor could flip the seat. This would strengthen Labor’s parliamentary numbers and suggest rural voters are abandoning conservatives.

Scenario 3 — Independent win: Rural and regional Australia has seen a surge in independent candidates who promise to prioritize local issues over party politics. An independent could win if voters want representation divorced from Canberra drama.

Scenario 4 — Nationals challenge: The National Party (Liberals’ coalition partner, focused on rural issues) might see this as a chance to expand their own representation in the region.

Different Perspectives

Liberal Party strategists are likely worried. Losing Farrah would be both a symbolic and practical blow — symbolic because it’s Ley’s long-held seat, practical because it weakens their parliamentary numbers during an already difficult period.

Labor campaign teams see opportunity. Rural seats have been shifting politically across Australia, and leadership chaos in the Liberal Party creates an opening to flip traditionally conservative electorates.

Independent candidates might argue this is exactly why voters need representatives who focus on local issues rather than party room drama. The trend of “teal independents” (centrist independents focused on climate and integrity) has reshaped Australian politics.

Local voters face a choice: stick with the party that’s represented them for decades, or use this by-election to voice frustration with political instability and demand different representation.

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Sussan Ley, who made history as the Liberal Party's first female leader, lost her job today after just nine months — replaced by former energy minister Angus Taylor in a party room vote that signals ongoing chaos for Australia's main opposition party.

Sussan Ley announced Friday she’s stepping down as Liberal Party leader and quitting Parliament entirely after losing a leadership ballot, ending both her historic tenure as the party’s first woman leader and her 25-year career representing rural New South Wales.

The 63-year-old made the announcement in an emotional press conference, quoting her recently deceased mother: “When something ends in sadness, don’t dwell on the disappointment. Be grateful that you had it at all.”

What Just Happened

Ley took over the Liberal Party leadership in May 2024 after the party suffered what she called “the worst defeat in 81 years” in the federal election. She became the first woman to lead the center-right party in its history — a milestone that lasted less than a year.

Today, Liberal MPs voted to replace her with Angus Taylor, a former energy minister who Ley said has “experience, energy and drive” to fight the current Labor government.

Ley said she holds “no hard feelings” toward those who voted against her and thanked supporters for their “unflinching loyalty.”

Why This Matters

For young voters: The Liberal Party is Australia’s main opposition, meaning whoever leads it shapes the alternative policies you’ll vote on next election. Leadership instability makes it harder for them to present clear policy positions on issues like housing affordability, climate action, and job security.

For women in politics: This marks another setback for female political leadership in Australia. The Liberal Party has never had a female prime minister, and Ley’s short tenure as leader suggests ongoing barriers for women in conservative politics.

For Parliament: Ley plans to resign from Parliament within weeks, triggering a by-election in her rural NSW seat of Farrah. If Labor or an independent wins that seat, it could shift the parliamentary power balance.

What Is the Liberal Party?

The Liberal Party is Australia’s center-right conservative party, currently in opposition after losing power in the 2024 federal election. Think of them as roughly equivalent to Republicans in the US or Conservatives in the UK — they generally favor lower taxes, smaller government, and more market-based solutions to problems.

The party room is the group of all elected Liberal MPs who vote on internal decisions like choosing their leader.

The Timeline

May 2024: Ley becomes Liberal leader after party’s historic election loss, becoming first female leader in party history

November 2024: Party lands controversial energy policy under her leadership

Earlier this year: Ley establishes royal commission into antisemitism, which she cites as a key achievement

February 2025: Ley loses mother, who she credits with shaping her resilient approach to politics

Today: Party room votes to replace her with Angus Taylor; Ley announces she’ll quit Parliament

What She Said

In her resignation speech, Ley framed her short leadership through the lens of personal loss and gratitude rather than bitterness.

“For those who supported me today, I thank you. Your loyalty, your unflinching loyalty, I will always appreciate,” she told reporters. “For those who did not, I genuinely have no hard feelings.”

She emphasized she’s “proud” of establishing the antisemitism royal commission and delivering the energy policy, while acknowledging the role was “challenging” and “at times very tough.”

Ley also revealed personal context: “When I came to the leadership of the Liberal Party nine months ago, my mother had just died.”

Different Perspectives

Ley’s supporters argue she inherited an impossible situation after the historic 2024 loss and deserved more time to rebuild the party. They point to her policy achievements and ability to unite the party after a difficult period.

Her critics within the party believed she wasn’t gaining enough traction against the Labor government and wanted a more aggressive opposition approach. The fact that enough MPs voted to remove her suggests significant dissatisfaction with her leadership style or electoral strategy.

Political analysts note this continues a pattern of Liberal Party leadership instability, with Ley becoming the latest in a series of leaders unable to complete a full term. This makes it harder for voters to understand what the party stands for.

Women’s political advocacy groups express concern that Australia’s conservative parties continue struggling to support female leaders, pointing to structural barriers rather than individual performance issues.

What Happens Next

Immediate: Ley will spend the next two weeks thanking constituents in Farrah, her electorate of 25 years.

Short-term: She’ll tender her resignation to the Speaker of Parliament, triggering a by-election in Farrah. Liberals currently hold the seat, but leadership chaos could make it competitive.

Angus Taylor takes over as opposition leader and will need to quickly establish his vision for the party ahead of the next federal election.

Long-term: Ley says she’s “stepping away completely and comprehensively from public life” to spend time with family and reconnect with her passion for aviation. She also mentioned returning to “the early punk rock movement in Canberra” — revealing a side of herself many Australians never knew.

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Angus Taylor has won the Liberal Party leadership in a decisive 34-17 ballot victory over Sussan Ley, who held the position for nine months. The Friday morning spill followed a mass frontbench exodus and was triggered by the party's polling collapse to below 20 percent primary support—historic lows—while One Nation surged to nearly 30 percent.

The partyroom is now voting on deputy leadership, with Taylor facing the challenge of uniting a fractured opposition amid what senior senators described as a "change or die moment" for the party.

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Liberal MP Angus Taylor resigned from Opposition Leader Sussan Ley’s shadow cabinet Wednesday night, declaring he no longer believes she can lead the party and describing the Liberals as weaker than at any point since their formation in 1944. The shadow defence minister told reporters he had just tendered his resignation after walking into Ley’s office, a move that sets the stage for a formal leadership challenge expected within days.

Taylor’s resignation comes amid mounting internal pressure over the Liberal Party’s historic polling collapse. The latest Sky News Pulse shows the party at 19 percent primary vote under Ley’s leadership, with her personal approval rating at minus 40 percent. Liberal Senators Sarah Henderson and Jane Hume have publicly warned the party faces an “existential crisis” and risks being “wiped out” unless change occurs.

Sky News reports the anticipated leadership spill vote is “extremely tight,” potentially hinging on one or two MPs. Ley has pushed back against public dissent, telling Sky News on Monday her leadership was “secure” and that party discussions should remain in the partyroom. Under parliamentary convention, shadow cabinet members must resign if they do not support the party leader.

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The New South Wales Supreme Court on Monday rejected a legal challenge by the Palestine Action Group against expanded police powers granted during Israeli President Isaac Herzog’s four-day visit to Australia.

Justice Robertson Wright dismissed the case hours before a planned protest at Sydney Town Hall, allowing police to maintain extraordinary search and move-on powers across the city’s central business district and eastern suburbs until Thursday.

Key Details:

• Police authorized to search anyone within designated zones without cause

• Powers invoked under “major event” legislation typically used for sporting events

• Non-compliance penalties reach $5,500

• Declaration covers four-day period across broad geographical area

Legal Arguments: The Palestine Action Group, represented by barrister Felicity Graham and Peter Lange SC, argued the Minns government improperly used major event legislation as a “backdoor way” to suppress political protests against a controversial head of state.

Government barrister Brendan Lim SC countered that powers were necessary to “secure the safety of the president, dignitaries and the community generally” following the Bondi terror attack that killed 15 people during a Hanukkah celebration.

Ongoing Implications: Protesters plan to proceed with Monday evening’s demonstration, potentially breaching separate public assembly restrictions extended last Tuesday. The restrictions effectively ban unauthorized marches in designated areas including Town Hall and the northern CBD, though Hyde Park remains excluded.

Sports Minister Steve Kamper cited concerns that confrontations could damage Australia’s international reputation, comments Graham characterized as revealing the government’s true intent to curtail legitimate political expression.

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Australian families are facing renewed financial pressure as inflation accelerated to 3.8 per cent in the year to December 2025, up from 3.4 per cent in November, according to data released today by the Australian Bureau of Statistics. The increase pushes inflation further above the Reserve Bank’s 2-3 per cent target range and marks a worrying reversal after months of gradual cooling.

The December quarter figures show broad-based price pressures affecting essential spending categories, with housing costs leading the surge at 5.5 per cent annual growth. Food and non-alcoholic beverages rose 3.4 per cent while recreation and culture costs jumped 4.4 per cent, driven by summer holiday demand.

“The 3.8 per cent annual CPI inflation to December was up from 3.4 per cent to November,” said Michelle Marquardt, ABS head of prices statistics, confirming the acceleration in her statement accompanying the data release.

The monthly CPI data, which provides more frequent inflation readings than the traditional quarterly reports, reveals how quickly cost pressures can shift. The December quarter overall showed a 0.6 per cent quarterly increase, translating to the 3.8 per cent annual rate.

Core inflation measures, which strip out volatile price movements to reveal underlying trends, also edged higher. The trimmed mean inflation rate—a key metric watched by the Reserve Bank—rose to 3.3 per cent in the year to December from 3.2 per cent in November. This suggests inflation pressures are embedded across the economy rather than concentrated in a few categories.

The goods versus services breakdown tells an important story about where pressures are building. Annual goods inflation reached 3.4 per cent, up slightly from 3.3 per cent in November, with electricity prices the standout driver at 21.5 per cent annual growth. Services inflation proved even stronger at 4.1 per cent annually, up from 3.6 per cent the previous month, led by domestic holiday accommodation jumping 9.6 per cent and rental costs rising 3.9 per cent.

Three major categories accounted for most of the inflationary pressure. Housing costs dominate the inflation picture, driven overwhelmingly by electricity price spikes as government rebate programs wind down. Food prices continue rising as weather disruptions hit fruit and vegetable crops while strong export demand pushes up red meat costs. Recreation spending surged during the summer holiday period, with domestic and international travel accommodation costs spiking sharply in December.

The electricity situation deserves particular attention. The 21.5 per cent annual increase primarily reflects Queensland and Western Australian households exhausting state government electricity rebates provided earlier in the year. When those temporary rebate effects are excluded, underlying electricity prices rose a more modest 4.6 per cent—unchanged from November and reflecting annual price reviews by energy retailers in July 2025.

For food, the report identifies specific pressures: beef and lamb prices both rose more than 10 per cent over the past year as strong overseas demand for Australian red meat pushed up domestic prices. Vegetable prices climbed 3.8 per cent annually, with weather-related shortages driving up costs for cucumbers, zucchini and capsicums. Fruit prices rose 4.2 per cent, partly due to reduced apple supply. Meals out and takeaway foods increased 3.5 per cent, reflecting higher wages and ingredient costs for hospitality businesses.

The recreation surge came from predictable seasonal factors. Domestic holiday travel and accommodation prices jumped 9.6 per cent annually, with the monthly December increase of 8.2 per cent reflecting strong demand before Christmas, summer school holidays, and major events including the Ashes cricket test series. International holiday costs also spiked 24.4 per cent monthly as airline prices rose across popular destinations during peak holiday season.

One bright spot emerged in the rental market, where annual growth of 3.9 per cent represented a slight easing from 4.0 per cent in November. The ABS attributed the moderation to stable vacancy rates in most capital cities, suggesting rental supply and demand may be reaching better balance after years of rapid increases.

What is confirmed: The ABS data definitively shows inflation accelerated in December 2025, driven by measurable increases in electricity, food, and travel costs. The statistical agency’s methodology is transparent and the figures represent actual price movements tracked across thousands of products and services.

What remains unknown: The data cannot predict whether this acceleration represents a temporary spike or the beginning of a sustained upward trend. Future movements in electricity prices depend on government rebate policies not yet announced. Food prices remain vulnerable to unpredictable weather patterns and global commodity markets. The Reserve Bank’s monetary policy response to this data is not yet known.

What all sides agree on: Inflation remains above the Reserve Bank’s 2-3 per cent target range, meaning Australian households are experiencing ongoing erosion of purchasing power regardless of how different economists or politicians interpret the causes or solutions.

Why this matters to Gen Z and Gen Alpha: If you’re renting, buying groceries, or planning to move out of home soon, this data shows the costs you’ll face. Electricity bills are hitting hard for anyone paying their own utilities. If you’re saving for a gap year or holiday, travel costs surged dramatically in December and may stay elevated. For those entering the job market, wage growth needs to exceed 3.8 per cent annually just to maintain your current buying power—anything less means an effective pay cut even if your nominal salary increases. University students living away from home face particular pressure from rising rents and food costs simultaneously.

The immediate implications center on monetary policy. The Reserve Bank Board meets regularly to consider interest rate settings, and this data provides fresh evidence that inflation pressures persist. Higher interest rates aimed at cooling inflation also slow economic growth and can increase unemployment, creating difficult tradeoffs for policymakers. For households with mortgages, any interest rate increases will add to monthly repayments already stretched by elevated living costs.

Beyond monetary policy, the data highlights structural issues. Electricity prices remain elevated despite renewable energy expansion. Food supply chains remain vulnerable to weather and export demand fluctuations. The housing market continues generating inflationary pressure through both rents and associated costs. These structural factors suggest inflation may prove more persistent than temporary pandemic-related disruptions that drove earlier price surges.

The December data arrives as Australia navigates a complex economic environment. Employment remains relatively strong, but household budgets face sustained pressure from elevated costs across essential spending categories. The acceleration in December, particularly the jump in core inflation measures, suggests the path back to the Reserve Bank’s target range may prove longer and more difficult than hoped.Mencari News (Australia) is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Australia’s Consumer Price Index rose 3.8 percent in the year to December 2025, up from 3.4 percent in November, marking a significant acceleration in inflation pressures across the economy, according to data released Tuesday by the Australian Bureau of Statistics.

Housing costs drove the annual increase, rising 5.5 percent and representing the largest contributor to inflation. Within that category, electricity prices surged 21.5 percent over the 12 months, primarily reflecting the depletion of state government rebates in Queensland and Western Australia that had previously cushioned household bills.

“The 3.8 percent annual CPI inflation to December was up from 3.4 percent to November,” said Michelle Marquardt, ABS head of prices statistics.

Food and non-alcoholic beverages rose 3.4 percent annually, with beef and lamb prices each climbing more than 10 percent due to strong overseas demand for Australian red meat. Weather-related shortages pushed vegetable prices up 3.8 percent, while reduced apple supply contributed to a 4.2 percent increase in fruit costs.

Recreation and culture inflation reached 4.4 percent, propelled by domestic holiday travel and accommodation prices that jumped 9.6 percent annually. December saw an 8.2 percent monthly spike in travel costs driven by Christmas demand, school holidays and major events including the Ashes cricket series.

Rental inflation showed modest easing to 3.9 percent from 4 percent, attributed to stable vacancy rates in most capital cities. The Trimmed mean measure of underlying inflation rose to 3.3 percent from 3.2 percent in November.

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Australian teenagers experienced a dramatic improvement in job quality in December 2025, with underemployment among 15-19 year olds plunging 2.1 percentage points to 17.4 per cent—the sharpest single-month decline for that age group in recent ABS records. The shift suggests employers are offering more hours to young workers rather than keeping them in precarious part-time arrangements.

The Australian Bureau of Statistics released the December labour force data Thursday, highlighting unusual strength in youth employment. “Fewer young people were underemployed in December, with the 15-19 year old underemployment rate falling by 2.1 percentage points to 17.4 per cent,” said Sean Crick, ABS head of labour statistics. The national underemployment rate fell 0.5 percentage points to 5.7 per cent overall.

Underemployment measures workers who are employed but want more hours than they’re getting—a chronic problem for younger Australians juggling school, entry-level jobs, and the rising cost of living. For teenagers, underemployment typically runs far higher than the national average because casual retail and hospitality jobs dominate youth employment, and these sectors often limit hours to avoid benefits obligations or manage unpredictable customer demand.

The December figures show 15-24 year olds as the primary drivers of both employment growth and improved job quality. While overall employment rose 65,000, the ABS specifically noted younger workers “moving into employment” as the key factor. The combination of more young people getting jobs and those already working getting more hours marks a significant tightening in the youth labour market.

Male underemployment fell more sharply than female underemployment across all age groups, dropping 0.8 percentage points to 4.6 per cent for men compared to a 0.1 percentage point decline to 6.9 per cent for women. This gender disparity mirrors the broader employment growth pattern, where male employment rose 49,000 versus 17,000 for females.

The data doesn’t reveal which industries expanded hours for young workers, but historically, improved teen underemployment correlates with growth in retail, hospitality, and warehousing—sectors that employ large numbers of younger workers. The survey period (November 23 to December 6) preceded Christmas but captured potential early holiday season hiring, though the ABS applies seasonal adjustments to account for predictable patterns.

The underutilization rate—which combines unemployment and underemployment to show total slack in the labour market—fell 0.7 percentage points to 9.8 per cent, its lowest level since mid-2023. The sharp drop indicates the labour market is genuinely tightening, with fewer people either jobless or stuck in inadequate part-time work.

What remains unclear is whether December’s youth employment gains will persist. Seasonal employment often spikes in November-December before collapsing in January-February as temporary retail and hospitality workers are let go. The detailed labour force data due January 29 will show whether young workers found permanent positions or are clustered in temporary arrangements vulnerable to economic downturns.

The trend underemployment rate remained at 5.9 per cent in December, unchanged throughout 2025. Trend data smooth out monthly volatility, and the fact that trend underemployment stayed flat while seasonally adjusted figures dropped suggests economists should wait for additional months before declaring a sustained improvement in job quality for young workers.

What both sides agree on: Underemployment fell sharply in December, particularly for younger Australians, indicating improved job quality.

Why this matters to Gen Z and Gen Alpha: If you’ve been trapped in a casual job begging for more shifts while your manager claims “business is slow,” December’s numbers suggest the power dynamic might finally be shifting. A 2.1 percentage point drop in teen underemployment in one month is massive—it means hundreds of thousands of young workers either got more hours or moved into better jobs. This could translate to actual financial stability instead of constantly trying to patch together rent money from three different gig-economy apps. However, the gender gap in these improvements (men benefited far more than women) and the question of whether these gains survive past holiday season means you shouldn’t quit your backup income sources just yet.

Next steps depend on January’s employment data (due late February) and whether underemployment continues falling or bounces back. If the trend holds, young workers might finally have leverage to demand better scheduling, higher wages, or benefits from employers who have spent years treating youth labour as infinitely replaceable.

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