Albanese's Pacific Diplomacy Tests Domestic Resolve Amid Cost-of-Living Crisis

Prime Minister Anthony Albanese is heading to the Pacific for the Pre-COP meeting in Fiji and Tuvalu, but his domestic agenda may still be on his mind. He will also attend COP in Turkey a few weeks later.

The Labor government's decision to co-host COP with Turkey has been overshadowed by other issues, including climate change, which has slipped down the public's radar. In contrast, artificial intelligence (AI) and its potential risks have gained attention recently.

Meanwhile, the Reserve Bank of Australia (RBA) hiked interest rates for the fourth time this year to the highest level since 2011, exacerbating the cost-of-living crisis. Treasurer Jim Chalmers attempted to shift blame onto external factors, but RBA governor Michele Bullock emphasized that domestic capacity pressures are driving inflation.

The government faces conflicting demands ahead of its budget update in December: responding to calls for fresh savings while providing new cost-of-living relief. Independent MP Allegra Spender proposed a return to means testing as a way to curb spending, but this may be politically challenging.