The May Budget is looming, and the Treasurer is facing one of the toughest environments since COVID and, before that, the Global Financial Crisis (GFC). The current crisis is the fifth major global shock in the last 20 years. They used to be spaced out further – the tech crisis in 1994 followed by the GFC in 2008 – but since then, frequency has increased. 

The Treasurer faces the prospect of higher inflation for longer, possibly hitting 5-6%. With it, he faces higher interest rates, meaning the Nation’s fast-accumulating debt will cost more to service, and, coupled with this, he faces the prospect that Australia’s GDP growth may well slow to 1.5% this year. With the prospect of the crisis no longer being resolved in the short term, Australia faces key long-term decisions.  Australia is in a pickle, under pressure from our American Allies to increase our defence spending in real terms, while receiving calls from many constituents and major lobby groups, such as farmers, to onshore services again – read: fuel, gas, fertiliser production.

All of this is occurring while dealing with a slowing economy and redlining productivity (no real growth in several years.

The 12th May 2026 will be a watershed evening for the Nation and for investors. It will set the tone for Investors in Australia going forward. Hopefully you can watch it.

Will the Treasurer be tempted to buttress his constituents with cost-of-living measures and increased wealth taxes on individuals and companies (the low road), while constraining Australia to higher intergenerational debt and higher interest rates?

Alternatively, take the “high road” and attempt to create a Strategic Plan for the redevelopment of the Australian economy to meet the geopolitical challenges we face and to build National resilience?

Perhaps there is somewhere in the middle – difficult to say. But as I have mentioned previously, the sign of a successful economy can feed, fuel and increasingly, defend itself.

Three-year election cycles make strategic decisions for the good of the Nation very difficult politically, and as we have witnessed across the range of governments, current and past, politics and economics rarely agree.

Regardless, we will know the answer on the 13th May 2026.