The old adage that a week is a long time in politics rang true this week.
In a historic move, the National Party of Australia formally ended its longstanding Coalition agreement with the Liberal Party following their 3 May Federal Election defeat. Nationals Leader David Littleproud cited disagreements over key policy areas, including nuclear energy and supermarket divestiture powers, as the primary reasons for the split.
The big winner in all this? Arguably, Prime Minister Anthony Albanese. The immediate fallout is significant: with the Nationals now operating as an independent bloc, the official Opposition comprises just 28 seats in the House of Representatives. This shift will grant the Albanese Government valuable breathing room in Parliament as it faces a divided and directionless opposition. With a clear mandate and fractured resistance, the Prime Minister may be entering the most productive phase of his leadership yet.
As the political landscape continues to shift, the Nationals’ decision marks a major departure in federal politics, leaving the Liberal Party to chart its future without its traditional partner. Discussions to rebuild the partnership remain on the table, with Opposition Leader Sussan Ley eager to resolve the issue as soon as possible ahead of the likely announcement of her shadow ministry in the coming week.
Stay tuned.
Top talking points
💸 RBA rate cut: The Reserve Bank has lowered the cash rate by 0.25 basis points to 3.85 per cent, citing easing inflation and slowing domestic demand.
🎙️ National Press Club address: Labor National Secretary Paul Erickson addressed the National Press Club, reflecting on the party’s election campaign, voter dynamics, and organisational strategy.
📋 Productivity consultations: The Productivity Commission has opened consultation on 15 priority reform areas as part of its five ongoing inquiries commissioned by the government.
🌍 International engagements: Mr Albanese attended the inaugural mass of Pope Leo XIV, meeting both the Pontiff and Ukrainian President Volodymyr Zelensky, before travelling to Singapore for talks with Prime Minister Lawrence Wong.
📮 Bradfield in recount territory: Independent candidate Nicolette Boele holds a slim lead in Bradfield, with a recount likely in the formerly safe Liberal seat.
Making headlines this week
Nationals–Liberals Coalition: Split and talks to reunite
In a significant political shift, the National Party has formally ended its federal Coalition agreement with the Liberals, citing disagreements over policies like nuclear energy and supermarket divestiture powers. Leader David Littleproud described the move as a necessary reset to better represent regional communities.
However, the split hasn’t closed the door entirely. Following the announcement, Mr Littleproud and Liberal Leader Sussan Ley agreed to delay announcing their shadow ministries while discussions continue. Both have left the option open for a renegotiated partnership.
While it’s unclear how the relationship will unfold, the move has already changed the dynamic in opposition. Whether temporary or long term, it marks a shift in how the two parties are choosing to work, and campaign, going forward.
Victorian budget delivers social spend and restraint
The Victorian Government handed down its 2025–26 budget, combining targeted social investment with a renewed focus on fiscal consolidation. Treasurer Jaclyn Symes outlined cost of living measures alongside infrastructure spending, aiming to support households while managing the state’s debt profile. You can read GRACosway’s full insights here.
Things to watch
🏛️ Parliaments return: The New South Wales, Victoria, Western Australia and Tasmania parliaments will sit next week as legislative sessions resume.
🧠 Workforce futures: CEDA will host a discussion on Australia’s future of work, focusing on skills, automation and long-term labour market reform.
🗳️ Liberal shadow ministry: The Liberal Party is expected to announce its new shadow frontbench following the election.
📅 Federal sitting calendar: The proposed 2025 sitting calendar has been released, with Parliament set to return on 22 July. Early priorities include student debt relief and housing reforms.
Financial reporting and wage data
ASIC has outlined its financial reporting and audit priorities for 2025–26, with a focus on revenue recognition, asset valuations, and superannuation disclosures. The regulator will also expand audit file reviews and begin monitoring compliance with mandatory climate reporting.
The ABS released data showing a 5.8 per cent increase in total wages and salaries paid by employers in the year to March 2025, reflecting continued wage growth across key sectors.
Pacific engagement and EU trade talks
Australia’s international and trade agenda remained active this week, with Minister for Foreign Affairs Penny Wong visiting Fiji, Tonga and Vanuatu to strengthen regional ties. Discussions focused on deepening cooperation across trade, development and climate resilience.
In Europe, Prime Minister Albanese met with European Commission President Ursula von der Leyen to reaffirm interest in a potential Australia–EU Free Trade Agreement. The meeting also touched on the prospect[paywall] of a new bilateral defence cooperation deal.
Domestically, the New South Wales Government released its Trade and Investment Strategy 2035, outlining a long-term plan to boost exports and diversify markets as part of the state’s broader economic resilience efforts.
Resources policy and heritage planning
At the AFR Mining Summit, Minister for Resources Madeleine King confirmed that a taskforce will be established to finalise the design of the Critical Minerals Strategic Reserve, a policy announced during the election campaign. The initiative aims to support Australia’s position in global supply chains for key transition materials.
The Western Australian Government also reaffirmed its commitment to developing a domestic hydrogen industry, continuing its support for regional hydrogen hubs in the Pilbara and Mid-West to align infrastructure investment with future demand.
In planning and heritage, the New South Wales Government released its first state-wide heritage strategy for consultation. The draft has already attracted more than 1,700 submissions, with a focus on better integration between heritage and planning systems, collaboration with Aboriginal communities, and the role of heritage in climate adaptation.
Housing system review and state planning reform
The National Housing Supply and Affordability Council released[PDF] its State of the Housing System 2025 report this week, providing a snapshot of current housing demand, supply, and affordability across Australia. The report includes future projections and offers 15 policy recommendations across five priority areas aimed at improving housing outcomes nationally.
In South Australia, the government introduced planning amendments linked to the Greater Adelaide Regional Plan. The changes to the Planning, Development and Infrastructure Act 2016 are expected to support the delivery of more than 61,500 new dwellings across the Adelaide region.
Education and health investment
Australia has formally backed the new WHO Pandemic Agreement, which aims to strengthen global systems for pandemic prevention, preparedness and response. The treaty-making process is expected to begin in mid-2026.
The Albanese Government has also made a submission to the Fair Work Commission, recommending wage increases for low-paid workers, including early childhood educators, cleaners and retail staff.
In state health, the New South Wales Government, alongside the University of Sydney and the Sydney Local Health District, has committed to the $780 million Sydney Biomedical Accelerator. The health education and research facility will house more than 1,200 researchers and clinical scientists.
Submissions have also closed for the NSW Public Accounts Committee inquiry into the safety and quality of services at Northern Beaches Hospital, ahead of its planned return[paywall] to public operation under NSW Health.
In case you missed it...
📺No love lost? Liberals and National fail to reach an agreement.