The Australian government has called a federal election, which will be held on Saturday, May 3. The party currently in power is the Australian Labor Party (ALP, or Labor), a center-left party led by Prime Minister Anthony Albanese. They have been in power since May 2022, at which time they defeated the Coalition (a coalition between the center-right Liberals and the further right Nationals), and gained power for the first time in a decade.
Q1: What might the next Australian government look like, and what might it mean for the country’s future policies?
A1: There are 151 seats in the Australian House of Representatives, and forming a government requires support from a majority of members in the House. This support can come from a single party or a coalition of parties. Suppose a party, or coalition, does not have a majority of seats on its own, but can achieve a majority with the support from independent members of minor parties. In that case, it can form a minority government. The last time this occurred in Australia was in 2010, when Labor led a minority government, formed in coalition with the Australian Greens. Currently, Labor holds 77 seats in the House, Liberals have 53 seats, and the crossbench, comprised of minor parties and independents, has 19, and there are 2 vacancies.
Following Labor’s strong showing in the 2022 election, their support began to slide after losing a national referendum on Aboriginal rights in October of 2023. This resulted in predictions of a Labor loss in the next election, which would make them the first government not to win a second term since 1931. However, since January 2025, polls have tightened and the election is now likely to be close, with recent polling suggesting that Labor has a slight advantage again. Even if the polling holds, it is still unclear whether Labor will be able to secure an outright majority or will need to form a minority government in coalition with the Greens and several independent members. If Labor must form a minority government, it would most likely do so with the Teals—centrist independents focused on environmental issues—and the Greens. The Teals and Greens would push Labor to focus on environmental issues but would be unlikely to play a major role in foreign policy beyond that.
The primary issues in this election are cost-of-living issues, and both parties, in advance of the election, have made promises to spend money on initiatives that they assert will lower costs for the average Australian household. Neither party is suggesting that it will undertake major government reforms, but their approaches to defense spending, energy, and climate are significantly different.
While there has been an unmistakable trend of decreasing enthusiasm for the major parties, the larger policy questions at stake in this election will be answered after the election and based on the size of the next government’s political coalition. A Labor majority will be unlikely to change the current policy trajectory significantly, as a win by Labor will be interpreted as an endorsement of their current orientation. If a Liberal Coalition wins, there will be some changes domestically and on defense spending. And, if there is a minority government, it is even less clear how much political capital the government will have to alter foreign or domestic policy, or to launch new policy initiatives.
Q2: What are the major issues shaping voters’ priorities?
A2: Neither Anthony Albanese (Labor Party) nor Peter Dutton (Liberal Party) is particularly popular with the Australian public, and as such, they are attempting to turn the election into a referendum on their opponent’s leadership abilities and their ability to better steward the nation on economic, energy, and defense issues.
Set against a backdrop of lower growth and increasing economic volatility, cost-of-living issues have dominated voter concerns, with inflation, housing prices, energy costs, macroeconomic policy, and healthcare all factoring into this election. Social cohesion has also become a major issue following a rise in antisemitism in Australia, with multiple incidents of vandalism and attacks on Jewish citizens and locations.
Foreign policy issues have received less attention during this election cycle, although the Chinese Navy’s recent circumnavigation of Australia, as well as the imposition of tariffs by the Trump administration, have brought foreign affairs into focus. Both major parties have presented themselves as steadier bets on national security and have put forth their plans for the appropriate size of the defense budget. Nonetheless, foreign policy remains an issue of less concern to the public than domestic economic issues. As a former Australian senior official recently commented, “the biggest challenge to overcome is the inability of our political class to position Australia for this new world.”
Q3: How are the major parties seeking to differentiate themselves on foreign policy and national security issues?
A3: Foreign policy and national security normally play a secondary role in Australian elections, and that remains true now despite the fact that both parties are asserting that the country is facing the worst strategic environment since the second world war, and in the face of provocations by the Chinese, rumors of Russia seeking regional bases, and the potential winddown of American aid in the Pacific.
Cost-of-living concerns are dominating the election. However, Australia’s role in the world—particularly in a much more fraught and turbulent environment—is inevitably factoring into voters’ decisions. Given extreme market volatility and a darkening security outlook, both parties are making the case that they are better qualified to lead Australia.
One exception to the lack of attention on foreign policy in this election is the Donald Trump factor. Anthony Albanese and Peter Dutton are both presenting themselves as better positioned to deal with Trump. What’s interesting here is that it is not at all clear what, exactly, constitutes dealing successfully with Trump, and whether it’s better policy and better politics to negotiate with Trump or push back against his demands. Some leaders have done well by holding fire and seeking favorable outcomes; others by arguing against his policies. Albanese and Dutton have certainly observed the successes and failures of other world leaders when it comes to dealing with Trump and thus seem to be alternating between expressing a willingness to stand up to Trump on behalf of Australia and to negotiate effectively with the U.S. president.
On the economic front, both parties are attempting to present themselves as more able to carve out a good deal for Australia—by negotiating more favorable terms with the Trump administration, and more responsibly steering the economy through a particularly uncertain period.
The two major parties are also seeking to differentiate themselves on the security, diplomatic, and environmental fronts. Labor is arguing that they are steadier in their diplomacy, more nuanced in dealing with China, forward-looking when it comes to renewable energy, and particularly attuned to the politics of the Pacific and Southeast Asia. The Liberal opposition asserts that it is more clear-eyed about Beijing’s intentions, more willing to invest in defense capabilities, and less amenable to rushing towards renewable energies at the expense of stability of supply and affordable price.
Spending on defense will get a hearing in the election. Labor regularly claims that it has increased investment in the nation’s security in unprecedented ways and will bring its overall investment up to 2.3 percent of GDP in 10 years. The Liberals accuse the government of chronic underfunding of defense, and this week announced plans to initiate a national security strategy—which has thus far been absent—and increase investment to 2.5 percent of GDP by 2029, and 3 percent within the next decade. Notably, only a third of Australians currently support an increase to their defense budget.
Q4: What are the potential implications of this election for Australia’s alliance with the United States and for its relationship with China?
A4: Australia and the United States have a deep, broad, and enduring security alliance and economic relationship. That’s true under Trump, just as it was true under Biden. But given Trump’s general hostility towards traditional allies, and his transactional approach to relationships, there are inevitable concerns in Australia about what this means for Australia’s relationship with Washington—especially as it was hit with tariffs. One result of Trump’s more disruptive policies has been a plummeting of public trust towards the United States, with 64 percent of Australians saying in a recent poll that they have no or not very much trust in the United States’ ability to “act responsibly in the world.”
Such concerns have been somewhat allayed by the Trump administration’s positive statements towards AUKUS, the Quad, defense industrial collaboration, and partnership on critical minerals. But, even as Australia and the United States move closer on certain issues such as force posture and defense policy, they are likely to drift further apart on other areas such as support for human rights and environmental issues. And the persistent concern underlying Australian foreign policy—fear of abandonment—is likely to grow under a more mercurial U.S. president. While there is talk about how Australia should recalibrate as the United States becomes a more demanding and less reliable ally, Canberra’s willingness to pursue a truly independent policy is constrained by its persistent constraints on defense spending. Moreover, Beijing has become much more assertive in the Indo-Pacific region, and Australia needs Washington to help maintain a favorable balance of power in the region.
Australia is also looking to build bonds with other countries to push back against the destabilizing aspects of Chinese power, including with Japan, South Korea, Indonesia, the Philippines, Papua New Guinea, and others.
And, while Australia has a strong commercial relationship with Beijing, it is, as the Australian government continues to assert, not a partnership based on either shared values, trust, or a common vision for the future.
Charles Edel is a senior adviser and the inaugural Australia Chair at the Center for Strategic and International Studies (CSIS) in Washington, D.C.
