First 100 Days of the Albanese Government: The Implications for Australia’s Role in an Evolving World Order

First 100 Days of the Albanese Government: The Implications for Australia’s Role in an Evolving World Order

August 2025

By Alan Reynolds. Based in Sydney and working at Sandpiper’s Government & Public Affairs practice, Alan has extensive experience in public affairs issues.

When Anthony Albanese’s Labor won the general election 3 May this year it marked the first second-term government in Australia in two decades. An increased majority and stronger mandate have emboldened the Government to make more substantial reforms compared to its first, more cautious term, including in healthcare, education and green energy.

We look at some of the foreign and domestic policy initiatives over the first 100 days of the second term, what they tell us about the course, and lessons for communicators, in Australia, Asia Pacific and beyond.

Australia recently joined a growing group of nations recognising Palestinian statehood, marking a significant diplomatic shift. This emerging foreign policy stance highlights a new and increasingly complex policy and comms environment facing governments and corporations, especially in regions such as the Middle East and Asia Pacific.

During its first hundred days, the Albanese Government has signalled its intent on reforms, economic sovereignty, recalibrated foreign relations, and a pragmatic approach to trade and defence. While legacy issues like housing and inflation remain contentious issues, there is an apparent underlying strategy, focused on projecting long-term competence over short-term populism.

For communicators, public affairs professionals and business leaders, this pivot holds lessons on strategic narrative framing, stakeholder management and risk navigation in increasingly volatile environments.

Strategic Diplomacy at Risk as a Result of US Tariffs

One of the more immediate challenges Albanese faced in his second term came from an unexpected direction, Washington. In April, the Trump administration reintroduced a 10% tariff on Australian exports, including agricultural and resource goods, as part of its broader protectionist agenda. The Australian Government avoided direct confrontation, with Prime Minister Albanese choosing to raise the issue directly with President Trump during the G7 summit in Canada.

While others such as Japan and Canada were hit with steeper tariff increases, Australia managed to avoid a more severe outcome. Trade Minister Don Farrell attributed this to quiet, persistent diplomacy. Trade in key sectors such as beef, wine and wheat has largely continued uninterrupted, though pressure remains to secure a more permanent resolution as businesses look for greater certainty.

AUKUS is Still Moving forward, Despite Questions

The AUKUS security pact remains central to Australia’s long-term defence strategy, with an estimated cost of A$368 billion over three decades. A delay in the United States’ internal review of the agreement has added uncertainty around submarine delivery timelines and access to advanced technologies. Australia has however pressed ahead, most notably with the May signing of a 50-year defence partnership with the UK.

Concerns have also been raised over the scale and complexity of the project and the risks of relying heavily on foreign systems in a shifting geopolitical landscape. Despite this, the Government remains firm in its commitment. AUKUS’ long-term nature and the scale of investment involved, means public scrutiny will likely continue.

Warming China Ties Signal a Reset

In July, Prime Minister Anthony Albanese’s second official visit to Beijing and Shanghai marked a key point of improved Australia-China relations after years of diplomatic tension, most notably under the Morrison Government. An ongoing reconciliation process has seen $20 billion worth of Chinese barriers on key exports such as wine, barley, coal, and lobster, lifted since Labor took office in 2022.

While security ties with the United States remain a priority, the reopening of the Chinese market is a welcome boost for Australian exporters. The Government has signalled that engagement with China will continue, framed around mutual economic benefit and strategic stability. This rebalancing is particularly important as Australia is navigating its role between major powers in a fast-changing region.

Cost of Living Pressures and Economic Reform

Domestically, cost of living is front of mind for many Australians, with household budgets under pressure despite signs of easing inflation. The Reserve Bank’s decision earlier this month to hold interest rates steady at 4.35%, after 13 consecutive hikes, has offered relief, but high rates continue to bite for mortgage holders and renters alike.

In response to ongoing financial strain, the Albanese Government has reworked previously legislated tax cuts introduced under Morrison. The revised cuts shift greater benefit to middle-income earners, which the Government says is necessary to reflect economic realities and to support those most affected.

The Albanese Government has also introduced a number of new reform initiatives, in areas such as housing, healthcare, education and unionisation. These reforms are arguably more interventionist, equity-focused and ambitious than those of most Australian governments in modern times, including during Albanese’s first term.

Future Made in Australia, an Industrial Agenda

The Future Made in Australia plan has emerged as one of the Albanese government’s most defining policies this term. With A$23 billion already committed, it is aimed at bolstering local industry in areas like green hydrogen, battery manufacturing and mineral processing. It’s a long-term play to create jobs, reduce import reliance, and generate value from Australia’s resource wealth.

This represents a shift towards economic resilience and national capability, but without nationalist and protectionist characteristics. The government is also seeking to position Australia as a competitive player in clean energy production, a move that could pay dividends as global demand for decarbonised supply chains accelerates.

Regional Relevance and Global Implications

Australia’s evolving international posture has not gone unnoticed. In Southeast Asia and across the broader Asia-Pacific, there is growing attention to how the country is navigating major power dynamics while advancing its own strategic interests. Meanwhile, the recent decision to recognise the State of Palestine has made waves in the Middle East, with potential implications for Australia’s relationships in the Gulf and beyond.

These moves suggest that the Albanese Government is taking a more assertive position on global issues, guided by values but shaped by careful diplomacy. As international perceptions shift, Australia’s choices on trade, defence and diplomacy will continue to influence its regional and global positioning.

Long-term Reform in a Short-term Media Cycle

The first 100 days of this term have indicated that the Albanese Government is pursuing a long-term reform agenda across industry, security, and the economy. The test ahead will be whether the efforts translate into tangible results in the eyes of the public, particularly on jobs, wages, and cost of living. Additionally, Australia appears to be entering a new phase of national identity-building, one that combines strategic alliances, local capability and a clear-eyed view of global realities.

For communicators, business leaders, and public affairs professionals, the key learning is clear. In a complex environment where issues unfold within an ever-changing media cycle, success depends on clear, values-driven messaging, sustained stakeholder engagement, and an ability to align long-term vision with short-term public sentiment. If the Albanese Government’s narrative resonates, domestically and on the world stage, it will be key in defining Australia policy going forward.

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