Australia faces a challenging year ahead, with 2026 expected to be even tougher than 2025. The recent terrorist attack at Bondi has exposed vulnerabilities in national security and highlighted the government's failure to address rising antisemitism. Increased policing and security measures are anticipated, but concerns remain about whether these actions are sufficient to prevent further incidents.

Economically, Australians continue to grapple with a persistent cost-of-living crisis, high inflation, and the prospect of rising interest rates. Home ownership remains out of reach for many, and the end of government handouts is set to make household budgets even tighter. Energy prices are expected to climb as the government pursues emission reduction goals, further fueling inflation and economic uncertainty.

The labour market shows signs of strain, with underemployment rising and productivity falling, threatening living standards. Housing affordability and rental pressures persist, exacerbated by strong migration and low vacancy rates. Internationally, protectionist trade policies and geopolitical tensions add to the uncertainty, while domestic politics offer little hope for major reforms, given a weakened opposition and a Senate dominated by minor parties.

As Australia enters 2026, the nation must confront deep-seated issues in security, economy, and social cohesion, with the risk that unresolved problems from previous years will define the future.