Weekly Wrap Up – 12 December 2025
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The Government has spent this week discovering the difference between winning an election and selling a contentious Budget. The 2026–27 Federal Budget may have marked Labor’s most ambitious attempt at economic reform in a generation; however, it has led to criticism from political opponents, industry and the community, and threatens to be derailed before it is implemented.
Changes to negative gearing and capital gains tax are at the centre of the debate – reforms Labor argues are necessary to tackle housing affordability and restore “intergenerational equity”. After years of caution and following a decisive mandate at the election, Anthony Albanese and Jim Chalmers decided to spend political capital. As it transpires, announcing reform is proving far easier than selling it.
Throughout the week, criticism spread well beyond the property lobby, as investors were surprised to find their assets caught up in the proposed changes. Many have warned the changes would hit retirement savings and “mum and dad” portfolios. Younger Australians questioned how changes to ETF and investment tax settings would affect their own attempts to build wealth. Meanwhile, Australia’s tech sector argued the capital gains overhaul could discourage risk-taking, weaken innovation and push startups offshore. Universities, business groups and parts of the financial sector also raised concerns about uncertainty, warning the reforms risked dampening investment confidence at a time of economic fragility.
The key question now is whether the Government holds firm or begins offering targeted exemptions and concessions to industries, investors and younger Australians most affected by the changes. This broad-ranging backlash has given the Opposition momentum to rally against the changes, framing the reforms as a broader assault on aspiration, investment and economic confidence.
While the Government insists the reforms are economically necessary and politically defensible, this week showed Labor must now carry ownership of the risks, alongside the rhetoric.
Things to watch
Prime Ministerial travel: Anthony Albanese began the week campaigning across three states to promote the Government’s Budget, beginning in Hobart before travelling to Adelaide and Perth.
Smelter Package: The Federal and Tasmanian Governments provided additional financial support to the Liberty Bell Bay manganese smelter during its administration and sale process.
Stafford by-election: Queensland Labor narrowly retained the Brisbane seat of Stafford. Labor candidate Luke Richmond defeated the LNP’s Fiona Hammond 51.2 per cent to 48.8 per cent.
Polling: The latest Newspoll shows Labor’s primary vote unchanged at 31 per cent, while the Coalition remains on 20 per cent. Support for One Nation has risen to 27 per cent from 24 per cent following David Farley’s victory in the Farrer by-election.
Making headlines this week
Post-Budget Reply Address
Start-Up Alarm
Australia’s tech and startup sector has criticised the Government’s reforms to the capital gains tax system, arguing the changes would discourage investment, reduce incentives for entrepreneurship and weaken innovation. Critics have argued that replacing the 50 per cent CGT discount with an inflation-indexed model and minimum tax rate would disproportionately affect founders and early-stage employees, who often rely on equity rather than salaries. Industry leaders warn the reforms could make Australia less competitive compared with lower-tax jurisdictions such as Singapore and the UAE, potentially driving startups and capital offshore. The backlash has extended to social media campaigns mocking Anthony Albanese and accusing the Government of penalising risk-taking, with the sector calling for targeted exemptions or concessions for startups and high-growth technology companies.
Things to watch
26 May, Mick Mulvaney and Joe Hockey will address the National Press Club, discussing geopolitics and the upcoming US mid-term elections.
27 May, the Australian Financial Review will host the 2026 Mining Summit in Perth.
27 May, the Australian Bureau of Statistics will release Consumer Price Index data.
27 May, Amanda Rishworth will address the National Press Club, discussing reforms to Employment Services.
28 May, the Australian Bureau of Statistics will release Private New Capital Expenditure and Expected Expenditure data.
Foreign Investment Reforms, Future Fund Board, and RBA Updates
Jim Chalmers announced reforms to Australia’s foreign investment framework. Changes include a new performance target to decide all low-risk applications within 30 days from 1 January 2027, alongside tougher scrutiny of foreign investment proposals, stronger monitoring and enforcement measures, and streamlined processes across the framework.
The Federal Government announced the appointments of Fiona Trafford-Walker and Adam Tindall to the Future Fund Board of Guardians, each serving five-year terms. Trafford-Walker commenced on 12 May, and Tindall will begin in September.
Assistant RBA Governor Sarah Hunter warned that if inflation expectations continue to rise, the RBA may find it harder to return inflation to its target range, potentially leading to a significant slowdown in economic activity.
Jet Fuel and Fertiliser Shipments and Defence Initiatives
Penny Wong announced three shipments of jet fuel have been secured, totalling more than 100 million litres. Separately, 38,500 tonnes of agricultural grade urea from Brunei has also been secured.
Richard Marles travelled to Timor-Leste to represent Australia at the 24th Anniversary of the Restoration of Independence. Discussions focused on strengthening bilateral defence and security partnerships, as well as cooperation through the ASEAN Defence Ministers’ Meeting-Plus.
The Federal Government will begin work to extend the operational life of Australia’s Collins-class submarines, investing up to $11 billion to strengthen sustainment, reduce capability risks and support the transition to nuclear-powered submarines.
Plastics Roundtable, Rare Earths, and Copper Study Moves
Murray Watt convened an industry roundtable to discuss the plastics supply chain, domestic packaging resilience and recycling reforms. Supply forecasts, potential alternate suppliers, cost minimisation and options to build domestic supply were on the agenda.
Madeleine King announced government support for Arafura Rare Earths’ Nolans project through the Critical Minerals Strategic Reserve, enabling a final investment decision. The project is expected to supply 4 to 5 per cent of global rare earth demand once operational.
Tim Ayres announced the launch of the Mount Isa Transformation Study to identify long-term opportunities across North West Queensland’s copper industry and support future regional economic development initiatives. CRU International has been engaged to lead the study.
Aviation Agreements and Digital Platforms Developments
Catherine King signed four new aviation agreements with the Maldives, El Salvador, Qatar and the United Arab Emirates, in an effort to expand tourism and trade opportunities.
Anika Wells announced a renewed partnership between Sports Integrity Australia and the eSafety Commissioner. This followed the release of new research that one in five children experienced online abuse from someone connected to their sport.
Meanwhile, the Federal Court has penalised X $650,000 for failing to comply with an eSafety transparency notice, which required it to provide information about measures taken to combat child sexual exploitation and abuse material online.
Ebola and Unemployment Rate Updates
Mark Butler discussed Australia’s health preparedness, stressing readiness for Ebola and other infectious disease threats. He also highlighted coordination across public health systems and the emergency response capability.
Following an increase in Australia’s unemployment rate to 4.5 per cent in April, Amanda Rishworth said that Australia’s labour market remains resilient despite signs of softening amid ongoing global economic uncertainty.