Australia is navigating an increasingly complex and interconnected environment shaped by global uncertainty, economic pressures, a deteriorating security environment and changing community expectations. Economic conditions are expected to remain challenging, with subdued growth, persistent cost-of-living pressures and rising demand for government services. Inflation remains elevated due in part to global energy price shocks, with growth expected to soften in the near term before gradually recovering. At the same time, structural shifts – including the transition to net zero, demographic change, technological advances and changes in the global balance of power – will continue to reshape the economy and policy landscape.

The Office of AI was established in PM&C on 15 July 2026 to coordinate across Australian Government agencies to design and legislate the new Australia artificial intelligence (AI) standard and unlock AI training in Australia. The Office will ensure that investment in AI benefits the Australian people, is aligned with our values, and advances our national interests.

PM&C will support the government’s economic agenda and its efforts to improve productivity, strengthen economic resilience, progress tax reform and ensure fiscal settings are disciplined, targeted and sustainable over the medium term. This includes supporting reforms to reduce regulatory burden, encourage business investment and innovation, and improve workforce participation and mobility. We will strengthen the policy and institutional frameworks underpinning economic management, including by improving the quality of advice, supporting effective decision-making and enhancing coordination across the public service.

Social conditions are evolving alongside these changes. Australia’s ageing population will continue to drive demand for care and support services and ongoing reform across systems such as aged care and the National Disability Insurance Scheme (NDIS). Ensuring the sustainability of these systems, including through targeted reforms to moderate growth in expenditure, will remain a key priority. Improving outcomes for Aboriginal and Torres Strait Islander peoples, strengthening social cohesion and ensuring access to high-quality services will remain central to the government’s priorities.

PM&C will support these priorities by working in partnership with other agencies to advance disability reform, including implementing changes to the NDIS and the rollout of Thriving Kids. We will contribute to the First Nations Economic Partnership and Closing the Gap, working collaboratively with communities, Aboriginal community-controlled organisations, and state and territory governments to improve outcomes. PM&C will continue to support the government’s efforts to strengthen social cohesion, including in response to the Bondi antisemitic terrorist attack and through the Royal Commission on Antisemitism and Social Cohesion.

Persistent and complex gender inequality continues to shape Australia’s social and economic environment. The national crisis of violence against women continues to impact the community, with ending violence remaining a key priority for the Government. Despite progress in workforce participation and reductions in the gender pay gap, disparities remain in areas such as economic security, unpaid care, leadership and health outcomes. Addressing challenges like this, as well as ending gender-based violence, requires sustained whole-of-government effort. 

The Office for Women (OFW) within the department provides leadership to advance gender equality, focusing effort across government in line with Working for Women: A Strategy for Gender Equality. There is ongoing high expectation from government that gender considerations are applied to policy development and decision-making. As gender analysis capabilities and practices mature, OFW is continuing to support departments to deliver on the whole‑of‑government commitment to gender equality through the use of gender‑responsive budgeting. Outside of budget processes, OFW is working across government to prevent the weaponisation of government systems, including child support, superannuation, tax and social security. OFW leads reporting against the government’s women‑in‑leadership targets, and plays a key role in supporting a gender equality lens in the government’s response to emerging challenges and priorities. 

Australia operates in an increasingly fragmented and disordered global system. Intensifying long‑term rivalry among major powers, rising protectionism, and rapid technological disruption are testing the foundations of Australian policy. Global shocks–including disruptions to energy markets–further amplify these pressures. At the same time, intersecting challenges such as geopolitical tension, economic fragmentation, climate change, and technological change are growing more complex. Recent conflicts, including in the Middle East, underscore the impacts of shocks on energy markets, national security, and crisis coordination. 

AUKUS is a key component of delivering security and stability to our region. PM&C is playing a more prominent role in whole-of-government support for Australia’s acquisition of conventionally armed, nuclear-powered submarines. This role is especially focused on working with all levels of government, industry and international partners to ensure the successful delivery of Australia’s Nuclear-Powered Submarine Program.

PM&C is supporting the government in reforming Australia’s disaster management system and is supporting implementation of the government’s fuel security and resilience measures, including strengthening fuel supply chains and improving national preparedness for future shocks. We are focused on risk reduction and resilience and on ensuring the system is fit for purpose in safeguarding Australia’s people and its economy.

Australians’ expectations of government continue to shift, with increased emphasis on integrity, transparency and quick responses to emerging issues. At the same time, reliance on digital systems is growing, with higher expectations for secure, resilient and real-time information to support decision-making.

Taskforces will continue to play an important role in responding to emerging government priorities. They provide focused capability to support policy advice, coordination and implementation in complex or time-sensitive areas. This includes addressing cross-portfolio issues and enabling timely, coordinated responses to national and international developments. In 2026–27, PM&C will continue to lead the Fuel Supply Taskforce, supporting the consolidation of advice and analysis across government to ensure consistent and coordinated updates on Australia’s fuel supply and engagement with the states and territories on fuel security through National Cabinet. This work supports the government’s broader fuel resilience and energy security agenda in response to global supply disruptions. 

PM&C will continue to partner with stakeholders, bring together expertise and perspectives from across government to support coordinated responses to complex, cross‑cutting challenges.