As Australia heads into 2026, the question in Canberra is not whether Anthony Albanese’s government can claim momentum after a strong year, but whether it can hold it. ABC political journalists and columnists, asked what they’ll be watching in the new year, point to a familiar truth of second-term politics: big wins can quickly give way to big expectations, and pressure tends to arrive simultaneously from the economy, the parliament and the electorate.
The Albanese government begins the year with the political benefit of having already banked a commanding election result. Historically, however, Australian governments that win comfortably often face a harder task immediately afterward: proving that victory translates into tangible improvements in living standards. That dynamic is likely to intensify in 2026, as economic conditions and policy trade-offs sharpen and as the opposition looks for a pathway back into contention.
Why the economy will dominate the political agenda
Even when governments set out with ambitious reform agendas, voters tend to judge them through an economic lens: household budgets, job security, mortgages and rents, and the price of everyday goods and services. In 2026, economic management is poised to be both the government’s main opportunity and its greatest vulnerability. If living cost pressures remain stubborn, the government can expect intensified scrutiny of every fiscal decision — from what it funds to what it asks the public to pay for.
For Labor, this is also a values test. The party is typically expected to protect services and social supports, but those commitments collide with the practical constraints of budgets, inflation risks and the politics of taxation. The same tension has shaped Australian politics for decades: reformers argue that new revenue is needed to sustain services, while opponents warn of burdens on business and households. In a climate where many feel financially squeezed, that argument rarely stays confined to economic commentators; it becomes an everyday political conversation.
Parliament, policy delivery and the limits of a mandate
After a landslide win, the public often assumes a government can do almost anything it wants. Yet in practice, governing is constrained by bureaucratic capacity, the complexity of legislation, and the realities of implementation. The new year will be a measure of whether the Albanese government can convert electoral authority into outcomes that voters can see and feel.
That matters because the easiest political attacks are about delivery: projects that run late, programs that disappoint, or reforms that are announced with fanfare but lose momentum. With a renewed mandate comes heightened accountability, and critics will be quick to frame any slow progress as complacency.
Labor governments also tend to carry an additional burden: they are frequently expected to govern across a wider range of constituencies, including union-aligned voters, urban progressives, and more economically cautious middle-Australia. Keeping those groups aligned through a demanding policy year will be a major political management task.
Opposition pressure and the battle for a post-election narrative
For the Coalition, 2026 is about rebuilding credibility and defining what it stands for after a bruising defeat. That process usually involves testing themes that cut through outside Canberra: cost of living, government competence, national security and migration settings. A disciplined opposition can increase pressure even without the numbers to block legislation, simply by forcing the government to fight on contested ground week after week.
The opposition will also try to shape a broader story: that the government’s win was a high-water mark rather than a new era. Whether that argument gains traction depends heavily on economic conditions and on whether voters sense improvement in their day-to-day lives.
Global uncertainty, local consequences
Australian politics never operates in isolation. Global energy markets, geopolitical tensions, and shifting trade conditions all have direct domestic consequences, especially for a country whose prosperity is closely tied to exports and international investment. In 2026, any deterioration in global conditions could quickly spill into Australian debates about budgets, industry policy and resilience.
These global factors also shape public tolerance for government decisions. When external shocks hit, voters want reassurance that leaders are prepared and responsive. When the outside world feels unstable, domestic political conflict can look less like normal contest and more like risk.
Why this year matters to readers
For most Australians, the stakes of 2026 won’t be measured in parliamentary tactics. They will be measured in whether wages stretch far enough, whether housing feels attainable, whether essential services improve, and whether the government can navigate competing demands without constant drift and distraction.
The ABC’s question — what to watch in Australian politics in 2026 — reflects a wider public mood: after a big election outcome, attention shifts from campaigns to competence. The government has political capital, but it also faces the classic second-term reality that capital is easiest to spend and hardest to replenish. The pressure, economic and political, is already on.
