The year is ending on a remarkably positive note for Australia’s majority Labor Government. The political finales include the passage of the environmental reform package and the implementation of controls on access to selected social media sites for teenagers under sixteen years of age. The consensus-building continued with the release of the national accounts for the September Quarter and preparations for the MYEFO report later this month.
Patrick Commins of The Guardian (3 December 2025) offers an outstanding summary of the trend lines from the national accounts data.
The last twelve months have ended with an annual growth rate of 2.1 percent in real terms compared with just 0.8 percent a year ago (ABS September Quarter National Accounts 3 December 2025):
Debt and deficit concerns were already apparent in the pre-election March federal budget. Our financial ministers opted for temporary deficits as alternatives to austerity measures. These budget deficit levels are not particularly significant and were quite apparent during periods of LNP Government prior to 2022 and in international comparisons with other developed economies. Only the rebound from the COVID-crisis produced a temporary budget surplus which extended into the first year of the Albanese Government in 2022-23 (Images: 2025-26 Budget Paper 1):
Current Budget Deficit Levels Offset Potential Austerity Measures
The International Comparisons with Other Developed Countries
Responsible private sector investment can reduce budgetary pressures as shown by investment highlights from the National Accounts data. Private investment grew 2.9%, contributing a significant share of GDP growth for the September quarter. This was the highest rate of quarterly growth seen since March quarter 2021. Business investment in machinery and equipment (+7.6%) led the rise, with strength attributed to major data centre investment across New South Wales and Victoria.
The Albanese Government has restored commercial engagement with China as noted by Professor Harrison Vesey of the University of Sydney. However, China has moved to diversify the direction of its overseas investment. More pragmatic commercial relations with China have been a quite recent feature of US economic diplomacy in critical minerals, semiconductors and food products.
The just released national accounts for the September Quarter show that Australian investment is headed in the right direction but could be less reliant on public sector spending if relationships with China had been improved earlier when strategic concerns about China had a stronger hold over foreign investment approvals.
With the Trump administration striving to rebuild commercial ties with China on terms more favourable to the US, there are fewer strategic barriers to Australia’s investment interactions with China. Regrettably, China’s Belt and Road investment strategies have moved onto more stable investment locations with potentially greater geopolitical influence for China.
Eminent commentators will continue offer their say about the prospects for the New Year. The worst scenarios are for Britain and EU countries that are quite remote from commercial exposure to China’s rise to superpower status. In China, a 4-4.5 percent growth rate is still regarded as a slowdown.
Denis Bright (pictured) is a financial member of the Media Entertainment and Arts Alliance (MEAA). Denis is committed to consensus-building on the critical issues raised in each article. Your comments on this and related articles can be recorded on theaimn.net site.
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Thanks Denis, you make some interesting points about the economy and investment picking up. Those signs are good for the country.
I do think some of the changes we are seeing might come from wider forces, not only government decisions. Businesses are still catching up after COVID, our population is growing quickly, and new technology projects are expanding. These may also be big reasons for the improvement.
On China, the situation seems more complicated. It is not just about Australia’s diplomacy. China has been changing its own investment rules and choosing different regions to focus on. The role of the United States in this is also mixed, with cooperation in some areas and restrictions in others.
I appreciate that your article encourages discussion. Looking at both the positives and the challenges can help us understand the whole picture as we head into next year.
Thanks Denis Hay. I am sure that we are both part of the United Front for Progressive Change. But where is our support base in the wider community? Working together is so important to develop interest in real change strategies in the wider community. Regrettably, out of the activist mix in Ipswich, where I once lived, opportunists emerged in the Broader Labor movement and new far-right leaders who stole the populist thunder of the Labor Party and its allies on the Left in Unions like the Miners’ Federation and the ARU. I recall reading my father’s Railway Advocate which came in the mail with feature articles about far away exotic far-off locations which I visited myself later in life. The support base for change in Australia is slender. That’s why I support the limited possibilities for change offered by the Albanese Government. Asking for more, might mean years in Opposition again as in the 23 years between 1949 and 1972.
Let’s avoid more ideological divides which hurt our living standards and our sovereignty
Even the White House has woken up to the value of new commercial associations with China
Thanks for a well-researched article summarising the Australian political situation and economy.
Wealthy Australians should pay their way and appreciate their taxation concessions and tax avoidance strategies.
The Australian continues with its biased financial news in every edition. Executives in high places steer the misinformation and would prefer a return to austerity over the current economic growth rate of 2 percent in the September Q National accounts. Calls for cuts in federal and state government spending have embargoes on defence spending with constant cheers for more AUKUS payments to US and British arms suppliers. Biased news is bad enough but it is repeated in editorial pages.
Let’s continue our commitments against global warming as storms leave millions homeless to our Near North
Australians are so fortunate to have a Labor Government: Leaders fear becoming more socially democratic because of sinister influences in the Australian media and surveillance by intel services from Britain and the USA: Encourage Albo to be more daring: These influences are ready to bring the government down as in 1975 and in 2019 against Malcolm Turnbull
China has just whacked a gigantic tariff on Australian beef, I wouldn’t be so confident that the Albanese government has any great relationship with China.
Take away the private investment in AI data centres and private investment looks poor – that’s not a good sign at all – are we going to be a country depending on AI data centres for sustenance?
Those Treasury forecasts show a structural budget deficit for well over a decade to come, and what has Labor done? At the last election it ran with a further tax cut to go with the modified stage 3 tax cuts from the Morrison government, making the structural deficit worse, but no doubt bribing its way to some more votes.
So it would seem that the rationale for voting Labor to go with ‘if you don’t vote Labor you’ll get Ley’ is now ‘it could have been worse, Labor could have gone all austerity measures too’ – yeeeeesss, and it could have been a lot better than Labor leaving millions of people suffering for years in a cost-of-living crisis whilst cruelling our children’s futures.
Why not show the figures that matter the most, the number of people who are living in poverty, the number of people suffering food insecurity, the tax that was forgone due to profits being shifted overseas, the royalties and tax forgone on mineral extraction and sales, the waiting lists for health care, the number of people who can’t afford a house, the proportion of household income spent on rent, household purchasing power parity, evaluation of our public schooling performance, evaluation of tertiary education performance, the number of completed apprenticeships, growth in the manufacturing sector, spending on research and development, and the like. Then talk to us about how well Labor is doing.