Australia's budget, unveiled ahead of May elections, marks a strategic and economic pivot to resource-driven growth, U.S.-aligned defense integration and sovereign industrial development, but its durability will be tested by fiscal and execution risks, alliance uncertainty and an increasingly volatile regional security environment. On March 25, Australia's government released the federal budget for the upcoming July 2025-June 2026 fiscal year. The budget marks a strategic inflection point in fiscal policy, placing defense industrial capability, critical mineral sovereignty and supply chain integration with allies at the core of national planning. Total expenditure is projected at A$786 billion ($520 billion), or approximately 28.4% of GDP, with a budget deficit of A$42.1 billion ($27.9 billion), or around 1.5% of GDP, largely reflecting forward investments in strategic sectors. Over A$10 billion ($6.6 billion) is allocated to the defense industrial base. This includes A$1 billion ($660 million) for accelerated development of guided missile production and...
