Weekly Wrap Up – 12 December 2025
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Australia hardened its strategic resolve this week as the third Middle East conflict in the last four decades continues to re-shape our daily lives.
On Monday, the Prime Minister and Deputy Prime Minister announced a new Chief of Defence Force, Vice Admiral Mark Hammond, and his replacement as Chief of Navy, Rear Admiral Matt Buckley. These appointments are telling. Hammond and Buckley are both submariners and are now at the top of the Australian Defence Force. In this decision, the Government re-emphasised the significance of Navy – particularly nuclear-powered submarine capability – to Australia’s strategic posture.
On Thursday, the Government doubled down on its assessment of Australia’s strategic circumstances. Notably, the previous formulation that we are living in the “most complex and challenging strategic circumstances since the end of World War II” has shifted to a more blunt and urgent warning. Our circumstances are still complex, but no longer are they “challenging” – they have become “threatening”. This is a subtle but significant shift in language. His assessment reflects a broader convergence of pressures: the war in Ukraine, instability in the Middle East, and intensifying US–China competition. The Deputy Prime Minister’s remarks reinforce a hardening consensus that our geographic distance can no longer be relied upon as a guarantee of our security.
In response, an updated 2026 National Defence Strategy and Integrated Investment Program with a $53 billion boost in defence funding over the decade was the headline announcement. There is a continued focus on capability delivery now, rather than in the future. In such a fiscally constrained environment, any doubt that the Government sees Defence as optional spending should be shattered. Both documents show a clear intent: preparing Australia for an era of protracted strategic competition with the Indo-Pacific as a key flashpoint. The underlying message is that we are not taking our eye off the ball in our region.
Behind the headline sits a more interesting story – how the Government gets defence spending towards 3 per cent of GDP from the current trajectory of 2.3 per cent. Rather than a single budget increase, Canberra is leaning on “off-budget” mechanisms and adding adjacent expenditure into the calculation of defence spending as a share of GDP in line with NATO countries. The most notable shift is a clear signal that the Government wants to use private capital investment to fund this increase. How it intends to implement this remains to be seen. It’s fiscally pragmatic and using a clear comparison makes sense, but critics see creative accounting dressed up as a strategic necessity.
The 2026 National Defence Strategy, as expected, continues the focus on long-range strike missiles, autonomous systems, and the maritime domain. A $5 billion injection into drone technology reflects lessons drawn from Ukraine and the Middle East, where relatively cheap, scalable systems have reshaped modern warfare. Land forces continue to be deprioritised in favour of technologies that project power further from Australia’s shores.
The political message is clear: Australia is preparing for a far more contested, hostile and less predictable world. The policy shift is equally stark – defence is no longer just insurance. It is fast becoming the centrepiece of national strategy.
Top talking points
Prime Ministerial Fuel Talks: Australia and Singapore pledged closer cooperation to secure energy supplies, maintain trade flows, and ensure economic resilience amid global uncertainty. Building on this, Anthony Albanese and Penny Wong travelled to Brunei and Malaysia to further strengthen regional fuel security.
National Press Club Address: Richard Marles discussed the National Defence Strategy and Integrated Investment Program at the National Press Club.
Online Safety Act Review: The release of the Government’s response to the review of the Online Safety Act outlines its priorities, which include progressing the digital duty of care and governance changes to eSafety.
Coalition Immigration: Angus Taylor outlined migration reforms, emphasising the importance of “Australian values”, stricter screening, deportations, and reduced intake to address security and social cohesion concerns.
Victorian Reshuffle: Jacinta Allan reshuffled the Victorian cabinet following ministerial resignations, promoting four new MPs and reassigning portfolios ahead of the upcoming state election in November.
Making headlines this week
Fuel Security Updates
IMF Recession Risks
The IMF warned that the global energy shock is materially worsening Australia’s inflation and growth outlook, raising the risk of a prolonged period of stagflation. Across its World Economic Outlook scenarios, the IMF reports inflation could remain above the RBA’s target until 2027, peaking around 4 per cent in 2026, while growth slows to about 2 per cent. The IMF stressed that higher fuel costs will seep into the transport, food and services sectors, and erode real incomes and weaken consumer and business confidence. In response, Jim Chalmers communicated that it is a “dangerous time for the global economy”, noting that the IMF is “expecting slower growth and higher inflation, and we are too”.
Things to watch
21 April: the ABS will 
22 April: Mark Butler will 
23 April: the ABS will Washington Travel, CGT Consultations, and Takeovers Appointment Moves
Jim Chalmers travelled to Washington to attend the G20 Finance Ministers’ and Central Bank Governors’ Meeting and the IMF–World Bank 2026 Spring Meetings. He advocated for greater global cooperation amid this fuel crisis, while also promoting Australia as an attractive destination for investment.
Treasury opened consultation on proposed amendments to Australia’s foreign resident Capital Gains Tax (CGT) regime. The draft legislation clarifies foreign residents’ CGT obligations by updating the definition of “real property” and introducing a 50 per cent CGT discount for renewable energy asset sales until 2030.
Daniel Mulino announced the appointments of Justin Harris, Jane McAloon, Christine McLoughlin, and Antonella Pacitti to the Takeovers Panel.
Defence Appointments, Trade Resilience Service, and Defence Testing Updates
Anthony Albanese announced the appointment of Vice Admiral Mark Hammond AO RAN as Chief of the Australian Defence Force, and Lieutenant General Susan Coyle AM CSC DSM as Chief of Army and Chief of Joint Capabilities.
Don Farrell appointed a team of trade and logistics experts to help Australian exporters navigate significant shipping and cargo disruptions. The Trade Resilience Service will complement the work of the recently established Trade Diversification Taskforce.
The first Australian–made Guided Multiple Launch Rocket System (GMLRS) missiles have been successfully test-fired, marking a significant step forward in the Australian Army’s long-range capabilities. Australian suppliers will be progressively integrated into the GMLRS supply chain, supported by the Government’s $320 million investment to expand local manufacturing capacity for GMLRS components.
Critical Minerals, Strategic Reserve Powers, and Fertiliser Streamlining Moves
Madeline King announced a tranche of rare earths and critical minerals projects that will be funded under the $5 billion bilateral Critical Minerals Framework, which was signed last year. In Australia, priority projects that support the production of rare earths and critical minerals include nickel, cobalt, gallium, magnesium, vanadium and graphite.
Anthony Albanese confirmed the first fuel shipments secured under new strategic reserve powers include 100 million litres of additional diesel. Export Finance Australia partnered with Viva Energy to secure 570,000 barrels, strengthening Australia’s ability to stabilise supply, manage disruptions, and respond to rising global energy volatility.
Julie Collins streamlined fertiliser import processes, seeking to reduce delays, costs and administration. Changes, aimed at helping farmers access supplies more quickly, include offshore certification, simplified inspections, and support measures to strengthen supply and resilience.
Fuel Information Campaign, Roblox, and 2026 NSW EV Strategy Updates
Catherine King launched the Australian Government’s national fuel security plan information campaign, with $20m advertising to encourage Australians to take conservation and efficiency measures.
Following warnings from Anika Wells, Roblox announced it will introduce new accounts for under-16s, with tighter controls including chat and hangout limits, as well as increased visibility for parents. The changes will be rolled out globally from mid-year.
The New South Wales Government released the 2026 NSW Electric Vehicle Strategy, seeking to increase access to EVs and associated infrastructure. The strategy is focused on driving uptake in regional, remote and suburban areas.
Fair Work Commission, Labour Force, and Integrated Assessment Tool Investigation Developments
Following Amanda Rishworth’s approval for the Fair Work Commission (FWC) to fast-track an application from the TWU and ARTIO, the FWC issued a draft Road Transport Contractual Chain Order in response to rising fuel costs. The proposal includes mandatory, supply chain-wide rate adjustments, such as levies or reimbursements, to help operators recover expenses.
ABS data reported Australia’s unemployment rate remained steady at 4.3 per cent in March. Employment rose by 18,000, driven by an increase in full-time roles.
The Commonwealth Ombudsman is investigating the Federal Government’s algorithm-based aged care assessment tool following hundreds of complaints, amid concerns it may reduce support levels.