Politics With Michelle Grattan: Jim Chalmers On The Bondi Terror Attack And The Mid-Year Budget Update

The mid-year budget update would normally be big news. But this week it's been entirely overshadowed by the devastating Bondi terror attack.

To discuss the government's response to that deadly attack, as well as the outlook for Australia's economy in 2026 and beyond, for our last podcast of the year we're joined by Treasurer Jim Chalmers.

On the Bondi terror attack, Chalmers acknowledges the federal government needs to do more.

On the budget update, Chalmers says rising inflation is one of“the three big challenges” for Australia's economy, along with the need to boost productivity and manage global economic uncertainty.

He says the government has been conscious of“not making this inflation challenge worse”, which could add pressure on the Reserve Bank to raise interest rates.

On the rise of illegal cigarettes and plummeting tobacco excise revenue flowing into the budget, Chalmers dismisses calls to reduce that tax. Instead, he foreshadows the federal government will support greater crackdowns on organised crime and the illegal tobacco market.

Read more: Could making tobacco cheaper actually cut down smoking rates? We asked 5 experts

Looking ahead, Chalmers says ten priority areas from August's economic reform roundtable will help shape next year's federal budget.

He disputes that progress since the roundtable has been too slow, nominating reforms to Australian environmental laws, releasing a new artificial intelligence plan, reforming the construction code and other areas where changes have been made.

Read more: The clock is ticking on a golden opportunity for real change in Australia

Chalmers also talks up Australia's opportunities in artificial intelligence, if we can get the balance right between ramping up AI and its potential risks – including for people's jobs.

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