Weekly Wrap Up – 3 October 2025
The 2024–25 Final Budget Outcome, delivered by Jim Chalmers and Katy Gallagher, presented a cautiously optimistic fiscal outlook. The deficit has narrowed more than expected, largely thanks to stronger-than-anticipated tax receipts and surging commodity prices. But while the books may look healthier today, the long-term picture is far from settled. Structural pressures – an ageing population, ballooning healthcare costs, and growing demand for essential services – mean sound fiscal management remain important. Chalmers’ message was measured but firm: fiscal responsibility is a marathon, not a sprint.
Meanwhile, a diplomatic stress test is unfolding. China has reportedly suspended purchases of BHP’s iron ore, citing pricing disputes. It’s a move with real weight, both economically and strategically. For a government that has worked steadily to rebuild ties with Beijing, it’s a sharp reminder of how quickly economic cooperation can turn into geopolitical leverage. The Albanese Government’s oft-repeated mantra – to “cooperate where we can, disagree where we must” – is now being put to the test. With China looking to flex its muscle, James Paterson has urged the Government to intervene, criticising its inaction over the issue.
Alongside these challenging geopolitical issues, Canberra is stepping up its critical minerals strategy – a key area for safeguarding Australia’s economic sovereignty. Following Anthony Albanese’s meeting with UK Prime Minister, Keir Starmer, reports suggest Australia is considering offering stakes in its Critical Minerals Strategic Reserve to trusted allies. It’s a strategic shift, designed to deepen partnerships and push back against China’s dominance in this increasingly contested sector. Yet for all the ambition, the question remains: will Australia simply dig and ship, or will it build and refine? The future of sovereign capability in minerals processing remains in the spotlight, with key smelters at Mount Isa and Tomago facing ongoing uncertainty over their long-term futures. These are the industrial backbones that could move Australia beyond being a quarry to the world – and into a position of real strategic weight in the global supply chain. They are also a test of the Government’s critical minerals and sovereign capability strategies. With rising energy costs impacting the economic viability of such operations – which need to compete with heavily subsidised operations in China – what can the Government do to ensure their long term futures?
How the Albanese Government navigates these pressures – fiscal, diplomatic, and industrial – will be pivotal. At stake is more than a quarterly budget figure: it’s a test of Australia’s economic direction and strategic maturity.
Top talking points
Budget Update: Jim Chalmers and Katy Gallagher released the Final Budget Outcome for 2024–25.
BHP Blockade: China paused purchases of BHP’s iron ore amid ongoing pricing disputes, escalating trade tensions between Australia and China.
AUKUS Cleared: The US review of the AUKUS pact has reportedly cleared the project ahead of Anthony Albanese’s upcoming Washington visit.
UAE Agreement: The Australia–UAE CEPA has come into effect, enabling 99 per cent of Australian exports to enter the UAE duty free.
Optus Developments: Anika Wells met with Singtel CEO Yuen Kuan Moon, flagging concerns over the Optus Triple Zero outage.
Making headlines this week
Reserve Bank Decision
Housing Confusion?
Labor’s five per cent deposit scheme for first-home buyers came into effect on 1 October 2025. This initiative guarantees a portion of the home loan, enabling buyers to purchase properties with a smaller deposit and without the added cost of lenders mortgage insurance. Anthony Albanese acknowledged[paywall] that while the policy aims to improve homeownership access, it may cause a modest increase in house prices – Treasury modelling predicts a 0.5 per cent rise over six years. Meanwhile, Reserve Bank Governor Michele Bullock cautioned that significant improvements in housing supply are unlikely to happen quickly, raising doubts over the Albanese Government’s 1.2 million housing target set by the National Housing Accord.
Things to watch
7 October: CEDA will host the Australian Anti-Slavery Commissioner.
7 October: The House of Representatives will convene and Senate Estimates will be conducted.
8 October: Mark Vassella, BlueScope Managing Director and CEO, will address the National Press Club.
8 October: The ABS will release building approvals data.
8 October: The Townsville Summit will be held.
9 October: The Insurance Council of Australia will hold the 2025 Annual Conference.
Finance Financial Stability, Household Spending and Super Fund Reporting Developments
The RBA found[PDF] that the largest risks to Australia’s financial system come from abroad, including high and rising debt levels in major economies. Digitisation of the financial system also increases the potential for operational challenges.
Household spending rose by 0.1 per cent in August and 5 per cent across the year. Five of the nine spending categories rose.
ASIC’s review[PDF] into the financial reporting and audit of super funds found inconsistencies in disclosing investments, risking a misstatement of asset values.
Treaty and Defence Updates
Papua New Guinea Prime Minister James Marape signed the ‘Pukpuk’ defence treaty. The treaty, previously delayed due to domestic political concerns in PNG, outlines a mutual agreement for Australia and PNG to come to each other’s defence in the event of a military attack.
Richard Marles welcomed New Zealand Minister of Defence Judith Collins for a bilateral Defence Ministers’ Meeting. Discussions focused on modernisation of defence assets and strengthening the bilateral defence alliance between the two countries.
The Australian Government will invest up to $136.6 million in command and control capabilities to support the ADF’s air operations. This follows the signing of a sustainment contract with Kellogg Brown and Root to deliver enhancements focused on an electronic information management system.
Net Zero, Graphite, and Gas Movements
Chris Bowen announced $180 million in funding for the Industrial Transformation Stream to help regional manufacturers modernise operations. The Government also announced $12 million in funding for McCain Foods, Sugar Australia, and Blackmores to reduce gas use at their production facilities.
The Queensland Government released the Environmental Impact Statement Terms of Reference for the proposed Esmeralda Graphite Project. The project will extract 3.5 million tonnes of graphite ore annually.
The gas-fired Torrens Island Power Station will continue operations until mid-2028 following an agreement between the South Australian Government and AGL. The extension follows delays to the Project Energy Connect interconnector between South Australia and New South Wales.
Telecommunications, Road User Charge and NSW Housing Developments
Legislation to establish a national Triple Zero watchdog is set to be introduced, with Anika Wells pledging to fast-track telecommunications reforms in response to the Optus Triple Zero outages.
Jim Chalmers indicated the Government will not rush to introduce a road user charge on electric vehicles, aiming to ensure that any charge does not disincentivise the uptake of EVs.
The New South Wales Government released the draft masterplan for a 1,500-home project in Chatswood, including plans to redevelop a former Metro construction site into a mixed-use development.
The Inner West Council in Sydney narrowly approved its “Fairer Future” housing plan, rezoning areas of Ashfield, Marrickville and Dulwich Hill to allow for the construction of up to 31,000 new homes.
PBS, Aged Care, and Tobacco Updates
Australians with breast cancer and rare kidney disease can now access additional medicines at a lower price on the PBS. Medicines affected include Truqap, Nextstellis, Oxlumo, and Lucentis.
A Greens-led Senate inquiry into Aged Care Service Delivery raised concerns about the Albanese Government’s aged care reforms, finding they will increase prices and “ration” the care available for older Australians.
Consultation is underway for an independent review of residential aged care accommodation funding and pricing arrangements. The review was one of the key recommendations made by the Aged Care Taskforce, which delivered[PDF] its final report in March 2024.
New South Wales will require retailers and wholesalers selling tobacco or non-tobacco smoking products to display a valid licence at the point of sale. The move marks the end of a three-month grace period under New South Wales’ new Tobacco Licensing Scheme.