It’s been a politically charged week in Australia, beginning with Prime Minister Anthony Albanese’s six-day visit to China. The trip followed recent efforts to engage with US President Donald Trump and saw Albanese meet with President Xi Jinping and senior Chinese officials in a bid to strengthen economic ties and reset diplomacy amid rising geopolitical uncertainty. While widely viewed as a diplomatic win that helped restore momentum to a complex relationship, the visit wasn’t without its challenges.
In Washington, D.C., US Under Secretary of Defense Elbridge Colby triggered a minor diplomatic flare-up by suggesting Australia should “clarify” its position in the event of any future conflict over Taiwan. The unprompted remark caused unease in both Canberra and Beijing, prompting Australian officials to move swiftly to contain the fallout. This saw Albanese reaffirm Australia’s sovereignty and balanced approach to regional security and alliance management, themes touched on in his John Curtin Oration last week.
On the home front, a leaked Treasury document stirred up fresh political debate. The advice to Treasurer Jim Chalmers warned that Australia is unlikely to reach the National Housing Accord’s 1.2 million housing target. Additionally, Treasury advised the need for significant tax reform and deep cuts to government spending in the coming Parliamentary term. The leak sparked a media storm and political backlash, forcing Chalmers to front the cameras to defend the government’s housing and fiscal strategy. He acknowledged the scale of the challenge, admitting that tough choices lie ahead, though he stopped short of outlining any new measures.
Next week, Parliament returns for its first sitting since the 2025 Federal Election. While key government commitments – including a 20 per cent HECS debt reduction and potential environmental reform – are expected to headline the agenda, recent tragic developments in Australia’s childcare sector have pushed urgent reforms to the top of the government’s legislative agenda.
Plenty more to come – stay tuned.
Top talking points
✈️ China Visit: Anthony Albanese travelled to China for a six-day visit, marking his second official visit to the country since being elected.
🛡️ Taiwan Questioning: US Under Secretary of Defense Elbridge Colby is reportedly urging Australia to clarify its potential role in a conflict between the US and China over Taiwan.
📂 Treasury Leaked Documents: Treasury mistakenly leaked briefing documents to an ABC journalist, which advise the Federal Government to undertake tax reform and express doubts about Australia’s ability to meet current housing targets.
⚖️ Bradfield Challenge: Liberal candidate Gisele Kapterian is challenging the Bradfield Federal Election result, contesting 150 “line ball” ballots.
🔎 CFMEU Inquiry: The Queensland Government commissioned an inquiry into the CFMEU Queensland branch.
Making headlines this week
National Press Club Address
In his capacity as the Chair of the Australian Climate and Biodiversity Foundation, former Treasury Secretary Dr Ken Henry addressed the National Press Club. The address highlighted the need to reform Australia’s EPBC Act, describing it as outdated and a barrier to the nation’s transition to a net zero economy. Dr Henry endorsed establishing an independent environmental protection agency. This follows Murray Watt’s roundtable consultation on environmental reform last month, which Dr Henry attended.
RBA Surcharge Recommendation
The RBA has proposed eliminating surcharges on EFTPOS, Mastercard, and Visa transactions, seeking to reduce consumer costs by an estimated $1.2 billion annually. The proposal includes lowering interchange fee caps and mandating greater transparency from card networks to foster competition. The RBA has opened consultation on the proposal, with submissions open until 26 August. A final decision and rollout timeline on the proposal is expected to be released by the end of the year.
Things to watch
Job market shift, G20 Diplomacy and Cash Regulations
Marking a three year high, Australia’s unemployment rate rose to 4.3 per cent in June. The increase follows the RBA’s decision to keep the cash rate on hold, citing Australia’s low unemployment rate as a key factor in their decision.
Treasurer Jim Chalmers travelled to South Africa to meet with international counterparts for the G20 Finance Ministers and Central Bank Governors meetings, prioritising global ties, supply chains, and the net zero transition amid heightened geopolitical and economic uncertainty.
The CFR and ACCC released[PDF] a consultation paper on establishing a regulatory framework for cash distribution in Australia, following recent industry support to sustain Armaguard and ensure the long-term viability of Cash-in-Transit services.
Pacific Investments, Space Workforce Updates, and Humanitarian Program Consultations
The Federal Government has committed an additional $16.4 million to upgrade Palau’s renewable electricity infrastructure, supporting the development of its first large-scale solar power plant and battery storage facility.
The Australian Defence Force is establishing a purpose-built space workforce to meet the demands of the evolving space domain, with targeted recruitment and training to expand its existing capability in highly specialised roles.
Submissions to the Humanitarian Program 2025-26 Discussion Paper opened, seeking feedback on the program’s management and composition. This follows the Federal Government’s ongoing commitment to Humanitarian and Settlement Programs that meet Australia’s international protection obligations.
Climate Class Action decision, Victorian and Queensland Updates
The Federal Court of Australia handed down its decision in the case of Pabai Pabai & Anor v Commonwealth. The climate class action’s negligence claim failed with Justice Wigney noting matters of “high or core government policy” are not the proper subject of common law duties of care. Chris Bowen communicated that the government is finalising Australia’s first National Climate Risk Assessment and National Adaptation Plan.
The Victorian Government announced the Mineral Springs Master Plan (2025–32), which aims to attract more visitors, improve accessibility and visitor experience, protect water quality, and support Traditional Owners in determining their role in managing the springs.
The Queensland Government declared the Central Highland Iona beef facility a prescribed project, with the facility expected to process 200,000 head of cattle annually.
New South Wales Housing Push and Queensland Infrastructure Updates
Premier Chris Minns launched the New South Wales Housing Pattern Book, featuring eight architect-designed low-rise home plans, including terraces, townhouses, and manor homes. The designs offer 10-day fast-track approvals to help boost housing affordability and supply.
In Queensland, test drilling has begun[paywall] for the proposed North West Transport Corridor tunnel, which aims to ease traffic congestion in the region. The tunnel could stretch up to 11.75 kilometres, with options on the table ranging from $7.9 billion to $9.2 billion.
Education Roadmap and Biomedical Technology Funding
Jason Clare released a roadmap outlining the Federal Government’s education priorities, including legislation to reduce HECS debt by 20 per cent and measures to strengthen regulatory and enforcement powers in the childcare sector.
The Federal Government awarded $100 million in funding to support emerging Australian biomedical and medical technology innovations. The three recipient organisations will serve as incubators, supporting small and medium-sized enterprises and targeting projects within their areas of expertise.
In case you missed it...
📺 The PM scales the Great Wall of China