Weekly Wrap Up – 12 December 2025
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Australian politics this week was shaped less by what happened on the floor of Parliament and more by the crisis unfolding on the conservative side of politics, as the Liberals and Nationals decide whether their separation will become a divorce or they can reach an amicable arrangement that will keep the kids happy. The sideshow has monopolised the headlines and taken scrutiny and focus off the government.
As it stands, Liberal leader Sussan Ley has presented Nationals leader David Littleproud with a set of non-negotiable conditions for re-entering the Coalition – and a firm deadline. Littleproud has until Monday to agree, or Ley will move ahead and appoint a Liberal-only shadow ministry, formalising a split that has lingered for weeks.
Central to Ley’s demands is discipline. She wants the three Nationals – Bridget McKenzie, Ross Cadell, and Susan McDonald – who resigned after breaching shadow cabinet solidarity, barred from the frontbench for six months. Ley’s message is clear: caucus solidarity is not optional. For the Nationals, however, the proposal cuts to the heart of their independence and history of playing an outsized role in Coalition policy formulation, particularly at a time when their regional base is being seriously threatened by a surge in support for One Nation.
Littleproud has not ruled out compromise, even floating the idea of John Howard stepping in as mediator – a throwback to an era when Coalition discipline was taken for granted and electoral dominance assumed. A failure to reach an agreement would formalise the Coalition split at a moment when neither party can afford it.
That urgency is underscored by grim polling released this week. Support for the Coalition has collapsed to 19 per cent, while Pauline Hanson’s One Nation has surged to 26 per cent, overtaking the Coalition as Labor’s main competitor. Regardless, Labor continues to lead comfortably 56–44 on a two-party preferred basis.
The numbers highlight a dilemma with no easy answers. One Nation is cannibalising the Nationals’ vote in regional Australia, while the Liberals need to become competitive in suburban and metropolitan seats. For the Liberals to succeed, they will need to embrace a more pragmatic style of politics – a shift that risks pushing conservative voters further toward Hanson and populist policies.
For Ley and Littleproud, the coming days are pivotal. The question is no longer just whether the Coalition can be stitched back together, but whether it can reconcile two very different electoral strategies in a landscape that is rapidly moving against it.
Top talking points
RBA: The RBA lifted the cash rate to 3.85 per cent following an inflation increase to 3.8 per cent, well above the RBA’s target range.
Defence Estate: The Federal Government will sell 67 military sites, including bases in Melbourne, Brisbane and Sydney.
Hospital Funding Agreement: The Federal Government announced a $25 billion hospital funding agreement with Australian State and Territory Governments.
Polling: Polling shows support for the Coalition collapsing to 19 per cent, while One Nation has surged to 26 per cent. Labor leads 56–44 on a two-party preferred basis.
Victorian By-election: Former Liberal Deputy Leader Sam Groth quit the Victorian Parliament, triggering a by-election months before the state election.
Making headlines this week
Tax Reform?
Parliamentary Wrap
Following a special sitting week to commemorate the victims of the Bondi Beach attack, Federal Parliamentarians returned to Canberra for a two-week sitting period. The Federal Government’s parliamentary agenda was relatively light, with debate resuming on legislation to establish a Digital Assets Framework, pause scheduled tax increases on draught beer, and expand prescribing powers for certain nurses. In addition, the Federal Government advanced legislation to create the Australian Tertiary Education Commission, a new body that will ultimately be empowered to allocate international student places across higher education providers.
Things to watch
8 February: The World Renewable Energy Conference will be held in Perth.
9 February: Senate Estimates will commence.
9 February: The ABS will release household spending data.
10 February: The New South Wales and Queensland Parliaments will sit.
10 February: The ABS will release building approval data.
11 February: Ukraine’s Ambassador to Australia Vasyl Myroshnychenko will address the National Press Club.
11 February: ACCI will host Deputy RBA Governor Andrew Hauser.
12 February: ACCI will hold a CEO Forum.
12 February: The ABS will release overseas arrivals and departures data.
New ASIC Chair, New Class of Advisor, and Future Fund Developments
ASIC Deputy Chair Sarah Court has been appointed as Chair, succeeding Joseph Longo. She will commence the role on 1 June 2026 for a five-year term.
Daniel Mulino expressed caution about progressing the new class of advisor under the DBFO. The Government is reviewing the impacts of the NCA as part of efforts to prevent major fund collapses such as Shield and First Guardian.
The Future Fund delivered[PDF] a 12.4 per cent return last year, increasing its value by $29.54 billion and exceeding its mandate 10-year return target by 1.5 per cent. Venture capital performance was strong while public and private equities, infrastructure and alternative assets also made notable contributions.
Regional Security, Bilateral Discussions, and Iranian Sanctions Updates
Anthony Albanese travelled to Indonesia to meet with President Prabowo and formally sign the Australia–Indonesia Treaty on Common Security. The agreement aims to strengthen bilateral defence cooperation and strengthen regional security.
Penny Wong hosted Germany’s Foreign Minister, Dr Johann Wadephul. Discussions focused on the Australia–Germany bilateral relationship under the Enhanced Strategic Partnership and continued support for Ukraine.
The Federal Government imposed further targeted financial sanctions on Iran in response to nationwide internet and telecommunications blackouts, sanctioning over 200 individuals and entities and more than 100 Islamic Revolutionary Guard Corps members.
Net Zero Fund, Critical Minerals and Battery Project Moves
The Federal Government finalised the design of the $5 billion Net Zero Fund, set to launch in mid-2026 through the National Reconstruction Fund. The fund will provide concessional finance for industrial decarbonisation and clean technology manufacturing, with loans offered at the government bond rate minus one per cent.
Madeleine King also released a new Australian Critical Minerals Prospectus, showcasing 49 mining and 29 midstream processing projects. The Prospectus aims to support bilateral supply chain and defence cooperation under the United States-Australia Framework for Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths.
The New South Wales Government awarded contracts for six long-duration battery projects totalling 11.9 GWh. Developers include Neoen, BW ESS, Ark Energy, FRV, Iberdrola, and Bridge Energy, with support through ASL’s underwriting scheme.
Rex, Housing, and Development Approval Streamlining Updates
Catherine King announced that regional and remote airports affected by Rex Airlines’ voluntary administration can now apply for a share of $5 million through the Regional and Remote Airport Support Program. The measure aims to cover unpaid claims and sustain services.
The Federal and South Australian Governments signed an $801.5 million agreement to deliver around 17,000 new homes in South Australia. The Federal Government will provide concessional loans and grants, largely for water and enabling infrastructure, with construction starting from 2026–27.
The New South Wales Government established the Development Coordination Authority (DCA). The DCA aims to streamline development approvals by consolidating planning requirements and advice from 22 government agencies into a single body.
Health, State, Digital Rights at Work Developments
The Federal Government will require online prescriptions to be published on My Health Record to reduce medication-related patient harm. Consultation is underway on further reforms, including development of a National Medicines Record. Elsewhere, Mark Butler announced new additions to the Pharmaceutical Benefits Scheme, with prostate cancer medicines abiraterone acetate and prednisolone now listed.
In Victoria, people with existing ADHD diagnoses will be able to access online consultations through the Victorian Virtual Emergency Department for urgent medication refills. In New South Wales, Deputy Premier Prue Car returned to work after seven months of leave following a breast cancer diagnosis.
The New South Wales Parliament is currently debating the Work Health and Safety Amendment (Digital Work Systems) Bill 2025. Business groups have voiced concerns that it would grant unions the power to inspect digital work systems.