US DEMOCRATS’ POLL TRIUMPH; BASE BACKFLIP
Democrats storm Congress in US mid-term elections
President Donald Trump faces major legislative roadblocks, with his Republican Party losing control of both houses of Congress to the Democrats in the US mid-term elections. Pre-election in the House of Representatives, the Republicans held a wafer-thin margin in the 435-seat chamber. But the Democrats are on track to secure a commanding majority, with potentially more than 260 seats in the new House. Meanwhile, in the Senate, where one-third of the 100 seats were up for re-election, the Democrats seized at least seven seats, turning a pre-election 47-53 minority into a comfortable majority. The Democrats’ sweep included Senate wins in the former Republican strongholds of Texas and Kansas, where the party had not won Senate seats since 1988 and 1932 respectively.
PM withdraws heritage sites from Defence divestment plans
Prime Minister Anthony Albanese has announced that the Federal Government will withdraw a range of heritage Defence properties from a proposed divestment of the Defence Estate. Earlier this year, the government agreed to divest or partially divest 67 sites that were deemed under-utilised by Defence, not fit-for-purpose, and costly for the ADF to maintain. But the government will now retain for public ownership the Victoria Barracks sites in Sydney and Melbourne, as well as an air force facility at Point Cook and historic fort at Queenscliff in Victoria. A further five properties, including a naval base in Mosman, NSW and two golf courses, will be transferred or partially divested, while a tranche of eight properties will be placed on the open market or divested in partnership with state or territory governments.
Annual public sector wages and salaries bill rises by 6.6 per cent
Public sector employee numbers increased by 2.3 per cent and cash wages and salaries rose by 6.6 per cent across Australia’s three levels of government in 2025-26, according to latest figures. The Australian Bureau of Statistics said employee jobs across state and territory governments increased by 2.8 per cent over the year, ahead of the Commonwealth (one per cent) and local government (0.6 per cent). Cash wages and salaries rose by almost $3 billion at Federal level, ahead of state and territory government (up by $12.6 billion, or 6.6 per cent) and local government (up $986 million, or 5.6 per cent). As at June 2026, there were more than 2.6 million public sector jobs, with a total wages and salaries bill of $266 billion. Queensland recorded the highest job growth rate (up by 4.6 per cent) in 2025-26, while public sector wages and salaries in New South Wales rose by the highest rate, of 7.2 per cent.
AI investment, fuel costs raising inflation expectations, says RBA
Australia’s central bank has forecast that domestic inflation will not fall to the top of the 2-3 per cent target range until late 2027, nine months later than original projections. The Reserve Bank of Australia said higher fuel and other commodity prices, as well as artificial intelligence investment, were contributing to persistent inflation. It said that AI-related investment was driving rapid growth in prices for technology-related goods, and that inflation in many goods and services remained high. Many firms were experiencing cost pressures and were either increasing the prices of their goods and services in response to rising costs or were looking to do so. The RBA’s Monetary Policy Board released its update while raising the cash rate by 25 basis points to 4.85 per cent.
Commodities push up trade surplus in goods
Australia’s trade in goods is firmly back in positive territory, with the nation recording a $2.8 billion trade surplus, seasonally adjusted, in September on the back of higher commodity exports. ABS figures revealed a $1 billion lift in goods exports, while importation of goods fell $1.5 billion in the month. In August, Australia recorded a slim $184 million surplus in goods trade, following trade deficits in March and May. While iron ore and coal export volumes rose, the importation of crude petroleum rose by almost 17 per cent in September, and diesel by 12.3 per cent.
PC calls for more help, targeted regulation for fledgling businesses
A report to government on lifting the level of ‘business dynamism’ in the economy has called for improved information channels, better targeted intervention, and stronger insolvency settings to help growing businesses. The Productivity Commission’s (PC) interim report examined ways to remove barriers to the entry, growth and exit of businesses. It said that businesses did not always recognise when they needed help, often entering insolvency after substantial value had already been lost. Government support, the report said, should be “systematic, targeted to demonstrated barriers and rigorously evaluated.” The PC interim report also said that Australia’s insolvency system lacked a clear statement of purpose, objectives and principles.