When you think of outer space, you’re likely picturing stars, planets and moons. But much of space is filled with clouds of gas, plasma and stardust – known as interstellar clouds.

In the local parts of our galaxy alone there’s a complex of roughly 15 individual interstellar clouds. The Solar System is currently traversing one of them, aptly named the Local Interstellar Cloud. The origin and history of these clouds are believed to be tightly connected to the birth and death of stars. But we can see their imprints right here on Earth, in a place you might not expect – Antarctic ice.

My colleagues and I have been studying stardust trapped in old Antarctic snow and ice to trace the history of our solar neighbourhood, including the Solar System itself.

In a new study published in Physical Review Letters, we found a subtle clue that reveals our Solar System’s movement through the local interstellar environment over the past 80,000 years.

Looking down to see the sky

Astronomy usually looks outward. Telescopes collect light from distant stars and galaxies, allowing us to observe events across vast stretches of space and time. From these observations, we infer how stars live and die, how elements are formed, and how the universe evolves.

Our approach turns that idea on its head.

Instead of observing the light coming to us, we study the debris of exploding stars right here on Earth. As cosmic furnaces, stars forge many elements in their cores, from carbon and oxygen to calcium and iron. This includes rare isotopes (variants of chemical elements) such as iron-60.

When massive stars explode into supernovae at the end of their life, these elements are ejected into space and become interstellar dust.

Tiny grains of this dust then drift through the galaxy and occasionally find their way to Earth’s surface. Radioactive iron-60, a fingerprint of stellar explosions, is embedded within these grains. By searching for these atoms in geological archives on Earth, we can probe astrophysical events like supernovae long after their light has faded.

This is why Antarctica is so valuable. Its snow accumulates slowly and remains largely undisturbed, forming a layered record that stretches back tens of thousands of years. Each layer captures a snapshot of the material that was present in our cosmic neighbourhood at the time.

Finding stardust in Antarctic ice

When we studied 500kg of recent snow in Antarctica, we unexpectedly found this rare radioactive isotope. Where did it come from? There was no recent near-Earth supernova.

But our solar neighbourhood is filled with 15 clouds, with the Solar System currently traversing at least one of them. Is the stardust waiting in the clouds to be picked up by Earth? If yes, then the amount of stardust Earth collects should be related to their structure: the denser the clouds, the more iron-60 they contain. This was our educated guess in 2019.

Soon, other explanations were brought forward. Millions of years ago Earth received large showers of iron-60 from massive supernovae. Is the iron-60 in Antarctic snow the last remnant or an echo of this signal? A rain that became a drizzle?

To find out, we analysed a 300kg section of Antarctic ice, dating from 40,000 to 80,000 years ago. The process is painstaking. The ice needs to be melted and chemically treated to isolate tiny amounts of iron, including the iron-60 from the stardust.

Then, using the sensitive atom counting technique of accelerator mass spectrometry at the Heavy-Ion Accelerator Facility at Australian National University, we counted individual atoms of iron-60.

The expectation was straightforward: based on previous measurements from surface snow of Antarctica and several thousand-year-old ocean sediments, we anticipated a certain steady level of iron-60 deposition.

Instead, we found less. Not zero, but noticeably lower than expected.

This result suggests that less interstellar dust was reaching Earth during that period. This is a remarkable change on a comparatively short astrophysical timescale and does not fit the long timescales of the iron-60 deposits that landed here millions of years ago. Instead, we needed to look for a smaller, more local source for the isotope.

A fitting story

Naturally, astronomers are also quite interested in the clouds around the Solar System. Last year, a study reconstructing the history of the clouds arrived at the conclusion that they most likely originated in a stellar explosion. Furthermore, they found the Solar System has been traversing the Local Interstellar Cloud from sometime between 40,000 and 124,000 years ago.

If that’s correct, we would expect that the amount of iron-60 collected on Earth should have changed sometime in the same time period – between 40,000 and 124,000 years ago.

This is exactly what our results showed in Antarctica.

The story doesn’t fit perfectly, though. If these clouds did originate directly from an exploding star, we would expect way more iron-60 than we actually see in Antarctic ice.

Nevertheless, these clouds are imprinted in Earth’s geological record. If we look deeper and analyse even older ice, we might soon unravel the mystery of these local interstellar clouds, revealing their full history and uncertain origins.

Dominik Koll receives funding from the Australian Institute of Nuclear Science and Engineering (AINSE).

Author–artist Lee Lai has won the 2026 Stella Prize for her graphic novel, Cannon. This is the first time the Stella has been won by a graphic novel.

Lai, who was shortlisted for the Stella Prize in 2022 for Stone Fruit, has had work published in the New York Times, The New Yorker, Granta and more. Cannon was named as a best book for 2025 in several lists, and shortlisted for several prizes, including the Carol Shields Prize and a Los Angeles Times Book Prize.

Clearly, this is someone whose voice and sense of the contemporary world is hitting all the right notes.

With Cannon, we meet a young woman valiantly, if not very competently, struggling to craft and maintain a satisfying life. She jogs; she cooks; she listens to mindfulness recordings; she watches horror movies with her best friend. She seems able to maintain her cool in a context where the pressure keeps mounting.

This creates a glorious portrait of contemporary ennui, with bursts of bright emotion – anger, grief, longing – breaking up the monochrome world she otherwise inhabits in this largely black-and-white graphic novel.

A woman on the edge

Her nickname is ironic: her given name, Lucy, becomes “Luce” thanks to her best friend Trish – and then “Luce Cannon”. For most of the book, there could not be less of a loose cannon than Lucy. She holds everything together. Her aggressive, demanding, frail grandfather. Her mother, who cannot or will not support her daughter. Her creepy boss, her stressed-out colleagues and her new romantic interest, who isn’t ready for “a girlfriend thing”, but would “still really like to hang out”.

Lucy is a woman on the edge of a nervous breakdown. Lai has already alerted readers to this, drawing a character who presents as being all patience and duty, but is in fact ready to snap. The novel opens to a thoroughly wrecked kitchen. In the middle of the mess, observed by a flock of large birds, sits Lucy, panting from the exertion of breaking up furniture and china.

A woman (later introduced as Trish) views the scene, then offers her an unbroken plate: “One for the road?” Lucy smashes it, and they leave together.

Trish may be selfish and a bit feckless, but she has been part of Lucy’s life since school. She knows her, perhaps, better than anyone else. In fact, they were pretty much destined to be best friends: “I think we might’ve been the only two gay Chinese anglophone teens in all of Lennoxville [a town in Quebec, Canada].”

Such intimacy comes with its own problems. The first is how to keep a long-term friendship viable, in the face of the changing interests and aspirations of those involved. The second is whether being outsiders from the same mould – and having a shared enthusiasm for Australian horror movies – is enough for sustained intimacy.

Trish, a very promising writer, is being supported by her ex-teacher, now her mentor, Joyce, who encourages her to write edgy work – work that foregrounds the young/Asian/gay identity. “To the funding board,” Joyce tells Trish. “you’re a piece of a cultural niche that they’d very much like in their pocket.”

Trish finds this fascination with alterity “Gross”, but Joyce reminds her: “It’s money.” Lucy’s life and family are, for Trish, a rich vein of story, and she begins to mine it. Until Lucy discovers what she is doing and freezes Trish out.

This, it seems, is the final straw. When Trish corners Lucy in the restaurant kitchen after hours, their quarrel sparks the destruction that opened the novel – this time brilliantly rendered in bright red cells, to the soundtrack of a meditation tape. Both women give themselves over to the wrecking party, while the birds look on.

As they have been doing all through the novel, sometimes filling the cells, sometimes hovering on the edge. Corvids of course, have long been seen as portents: omens of death, or heralds of change. In this novel, they are probably filling both roles and, one hopes, offering Lucy at least some attention.

No villains

She deserves attention. Cannon is a gorgeous weaving of tragedy and comedy, brought together by a generous but sharply observant eye. Lai once said:

I have a rule for when I’m writing characters, which is ‘no villains, only messes’. No one can actually be a full villain and, if we’re willing to focus in enough, everyone’s bullshit and everyone’s mess is something that can be empathised with.

With all the mess Lucy both receives and generates, there is also empathy, compassion and connection. It is worth focusing in.

Jen Webb has received funding from the Australian Research Council.

It’s hard to overstate the impact that artificial intelligence has had since the release of generative AI platforms such as ChatGPT just three years ago. While they have led to countless advances in how we live and work, they have also been at the centre of controversies around domestic and sexual abuse.

The use of the AI tool Grok to remove women’s clothing in images brought the issue of so-called technology-facilitated abuse to the fore. But it’s a problem that predates AI – with Bluetooth trackers, wearable devices, smart speakers, smart glasses and apps all used by abusers to control, harass or stalk their victims.

This abuse has worsened as tech has become more embedded in people’s lives, and as AI advances rapidly. But governments have struggled to make tech companies design systems that minimise misuse, and to hold them accountable when things go wrong.

Our own research has confirmed that technology misuse has increased and that its harms are significant. But governments and the tech sector are doing little to combat it – despite numerous examples of how tech can enable abuse.

Case 1: Smart glasses

The growing availability of smart glasses – which look like normal eyewear but can do many things a smartphone does – has led to reports of secret filming. In some cases, videos were posted online, often attracting degrading and sexually explicit comments.

Meta has said its smart glasses have a light to show when they are recording and anti-tamper tech to make sure the light cannot be covered. But there appear to be workarounds.

In England and Wales, voyeurism legislation focuses on private spaces, and harassment laws do not specifically apply to targeted recording and online distribution. However, the UK Information Commissioner’s Office is investigating Meta after subcontractors were allegedly able to access intimate footage from customers’ glasses. This is in addition to a lawsuit in the US, which alleges Meta violated privacy laws and engaged in false advertising. Meta has said that it takes the protection of data very seriously and that faces are usually blurred out. It also discloses in its UK terms of service the potential for content to be reviewed either by a human or by automation.

Case 2: Bluetooth trackers

Apple’s AirTags, and other devices built for tracking personal items, can be misused to stalk and harass people, particularly women. Apple released updates to AirTags and other trackable tech so that potential victims would be alerted if an unknown device was travelling with them. But for many, this feature should have existed from the outset.

The law in England and Wales is clear that attaching tracker devices to someone without their knowledge is a criminal offence. But despite convictions, the ease of covertly monitoring people using these devices means people continue to be at risk.

Case 3: AI deepfake and ‘nudification’ apps

Apps can now “nudify” people, while AI is increasingly used to make non-consensual deepfake pornography. In January, several instances of xAI’s assistant Grok being used to create sexualised photos of women and minors came to light. All it took to create the images were some simple prompts.

After criticism, xAI decided to limit this feature. But the safeguards appear to apply only to certain jurisdictions and certain users.

In February, the UK government announced legal changes similar to the Take It Down Act in the US, which will require tech platforms in the UK to remove non-consensual intimate images within 48 hours. Failure to do so will result in fines and services being blocked, and the law is likely to be implemented from summer.

Using automated technology known as “hash matching”, victims will only need to report an image once to have it removed from multiple platforms simultaneously. The same images would then be automatically deleted every time anyone attempted to reupload them. Nudification apps and using AI chatbots to create deepfake pornography will also become illegal in the UK.

But there is more to be done. Mitigating risks must be embedded at the design stage to prevent these images being created in the first place. The rise of romantic and sexual chatbots means this has become more urgent.

And beyond deepfakes and nudification, AI can also enable harassment at scale. This includes directly targeting someone with abusive content, or fake images or profiles that impersonate victims for so-called “sextortion” scams.

Challenges ahead

These issues must be prevented with robust guardrails built into these technologies. This is what prioritising user safety should look like, after all. But often, these guardrails have failed. Safety tools are only usually added after public pressure, not built into platforms from the start.

Governments have allowed regulation to fall behind fast-paced developments. Tech companies have grown quickly, but laws and enforcement have not kept up. At the same time, police and legal systems are often under-trained or unclear on how to handle digital harm.

Even where there is regulation, such as the UK’s Online Safety Act, penalties for platforms that allow abuse are often weak or unenforceable. The regulator Ofcom has issued only voluntary guidance to tech companies on how to better protect women and girls on their platforms. Campaigners have called for this to be made mandatory, with clear penalties for companies that do not comply, placing it on a level legal footing with child sexual abuse and terrorism content.

As AI advances, tech companies must prioritise system design that puts user safety first. But until governments enforce real consequences, the tech sector will be able to profit from harm while those using the platforms bear the cost.

Jason R.C. Nurse receives/received funding from The Engineering and Physical Sciences Research Council (EPSRC), The Research Institute for Sociotechnical Cyber Security, The National Cyber Security Centre (NCSC), and the UK Home Office. He is affiliated with Wolfson College, University of Oxford as a Research Member, CybSafe as the Director of Science and Research, and The Royal United Services Institute (RUSI) as an Associate Fellow.

Lisa Sugiura receives funding from Home Office Domestic Abuse Perpetrators Intervention Fund

Compounding the alarm triggered by Russia’s 2022 full-scale invasion of Ukraine, the erratic unpredictability of the second Trump administration has made the need for European security autonomy obvious. On a number of occasions over the past year, Donald Trump has loosely intimated that he might leave the Nato defence alliance.

Washington’s recent move to withdraw 5,000 troops from Germany, plus unease over the US’s actions in Iran, have reinforced the imperative of European strategic independence. The US administration announced its planned withdrawal after the German chancellor, Friedrich Merz, criticised Trump’s Middle Eastern adventurism.

European rearmament is well underway. Governments still need to follow through on their promises to increase defence budgets to Nato’s new 5% of GDP target. But in 2025, European Nato members and Canada spent US$574 billion (£422 billion) on defence – an increase of nearly 20% on the previous year. This was the sharpest annual rise for 70 years.

The security debate should now move into a new phase in which European governments grasp the complex political implications of rearmament. These are gradually becoming apparent. Examples include a sharper trade-off between spending on defence and social programmes, and the prospect of Germany gaining military superiority as well as economic dominance.

There is also the danger of rightwing populist parties taking power with hugely increased military arsenals. Such parties are currently leading polls in France, Germany, the UK and several other countries, on agendas that sit uneasily with longstanding European security cooperation.

European militarisation adds to the eye-watering military build-up globally, which is increasing the risk of major conflict. There is also the harmful environmental impact of rearmament, and the threat of over-militarisation crowding out Europe’s focus on non-military security – an approach rooted in social development and conflict prevention.

These challenges show that rearmament represents a foundational shift for the European order. Simply grafting this defence build-up on to unreformed EU and Nato structures is likely to create new imbalances.

The EU risks losing its value as a peace project if it morphs into a security union without a more balanced and comprehensive political settlement.

Addressing the consequences

Concerns are rising in several European countries about the need to embed and constrain future German military power within a more deeply integrated EU. Calls for a “European army” are resurfacing, most recently by the Spanish government – but still without political precision.

Defence spending is growing not just through national governments, but EU-level instruments that entail deeper collective security. Many European governments are pushing towards Nordic-style, whole-of-society security in which military and civilian resources mobilise in unison. The EU’s Preparedness Union Strategy, introduced in 2025, is aimed at this too.

Such considerations show that a securitised Europe must be underpinned by continent-wide political debate and channels of accountablity. As citizens are asked to mobilise around full-spectrum defence, they need a greater say in security policies. They need a voice in the trade-offs that higher defence spending will require, and how to manage issues such as Germany’s incipient military predominance.

However, the process of rearmament is currently being carried out in a way that reinforces the opaque, crisis-mode features of EU decision-making that have nourished illiberal populist parties. Europe will struggle to legitimise its security turn without rivitalising its collective political system in ways that provide stronger and more active societal input.

European powers are currently seeking to act more assertively in defence of their immediate geopolitical interests. They are doing so while not entirely jettisoning the liberal-order principles of rules-based cooperation and openness.

But they are struggling to inject this combination with clear, precise content. European governments have not, together, defined a common position on how far European rearmament should be used to project sharper-edged power externally, in addition to dissuading aggression against European territory.

European security deployments and conflict prevention elsewhere in the world have retrenched in recent years. The withdrawal of EU military forces from Africa’s Sahel region is perhaps the most notable example. It is unclear whether the current security turn aims to reverse this trend, or move further in the same direction.

Rearmament also raises questions about the organisational structure of the European order. Security dynamics are altering power balances and the relationship between different regional bodies. They are dragging the UK back into European affairs, for example, and prompting talk of new, flexible forms of alliance across the continent.

Upgrading European burden-sharing and coordination within Nato is overdue. But the alliance is unlikely to suffice as a structural, ordering principle for post-Trump security autonomy. Other formats will be needed to allow greater thematic and geographic adaptability.

Discussions took place on defence and security matters at the European Political Community summit in Armenia on May 4. It involved not only EU member states but the UK and other non-EU European powers. Recent European coalition efforts covering Ukrainian security and navigation in the Strait of Hormuz may herald a trend towards functional and shifting clusters of states.

Security debates do not neatly match the EU’s economic and regulatory space – and this invites reflection on innovative formats. Excluded from EU security plans, the British government especially needs to be ready with proactive ideas that contribute to structural reordering, well beyond negotiations of the current EU-UK reset.

As the EU finalises its new security strategy and the UK moves forward with implementing its strategic defence review, European governments need to address the political ramifications of rearmament. These present harder, more structural challenges than hiking defence budgets – but currently, governments are pushing them down the road.

Until these challenges are resolved, European rearmament will rest on shaky foundations, and generate many difficulties in its wake.

Richard Youngs receives funding from several EU research projects.

For most policymakers, export credit agencies (ECAs) are financial tools that boost national companies’ business endeavours abroad. But a recent research project conducted by Philipp Censkowsky, Paul Waidelich, Igor Shishlov, and Bjarne Steffen reveals the profound impact they have on the energy transition. Our study analysed 921 energy-finance deals backed by ECAs from 31 countries between 2013 and 2023.

We used commercial transaction data to track how much ECAs invested in fossil fuels versus renewable energy. We also examined key policy shifts to understand how international agreements influence the decisions ECAs make.

Are ECAs slowing down or speeding up the low carbon transition? For years, export credit agencies have been key players in global trade finance, providing state-backed loans, insurance and guarantees to support national exporters. But their role in the energy transition is now under scrutiny.

While some ECAs have made strides in shifting finance away from fossil fuels, many remain deeply entangled in financing oil, gas and even coal — the dirtiest fuel of them all.

Our research underscores this reality. ECAs are major enablers of energy infrastructure worldwide, and their continued support for fossil fuels is at odds with international climate commitments.

What’s holding ECAs back from making a full transition?

These agencies have historically played a crucial role in financing fossil fuel projects by de-risking investments for private lenders. This influence is massive — comparable to multilateral development banks — yet their role in shaping the energy transition has been largely underexplored in academic research.

In our study, we found a clear trend:

ECAs are slowly pivoting towards renewable energy, but fossil fuel projects still receive a large share of support, even as international pledges like the Glasgow Statement call for the phasing out of international fossil fuel financing.

A fragmented shift

Our paper shows that, in 2013, only 9% of ECA energy commitments went to renewable energy technologies (RETs). By 2023, that share had jumped to over 40%.

While this suggests a significant shift, the total dollar amount of fossil fuel financing remains high.

Certain ECAs, particularly those in Europe, have made stronger commitments to “greening” their portfolios, while others — like those in Japan, South Korea and China — continue to support fossil fuel infrastructure.

Breaking down financing patterns reveals important nuances:

• Coal financing has has sharply declined among OECD ECAs, following the adoption of international restrictions. However, some non-OECD countries continue to finance coal projects, particularly in emerging economies.

• Oil and gas projects still dominate ECA commitments, especially in the early stages of production and transportation. Even as financing for coal declines, oil and gas deals receive billions in state-backed support.

• Wind energy leads the charge in renewables financing, with large offshore projects securing significant ECA backing. Solar and hydrogen projects, while growing, still lag behind.

One of the most striking findings of our research is that ECA-backed renewable energy investments are overwhelmingly concentrated in high-income countries.

Developing nations — where clean energy investment is most needed — receive little support, a trend driven by the high perceived financial risks, and a lack of strong policy incentives.

Policies’ limitations

Why do some ECAs lead in the energy transition while others lag behind?

A key factor is their mandate and political will of their respective governments. Many ECAs are designed primarily to promote national exports and domestic job creation, with little regard for climate or sustainability objectives. This narrow focus has made it difficult for ECAs to pivot away from fossil fuels, even when their governments have pledged to do so.

Some countries, however, are starting to rethink this approach. In the UK and the Netherlands, studies have shown that shifting export finance from fossil fuels to renewables can actually create more domestic jobs. ECAs in countries that have integrated climate goals into their mandates — like those in the Export Finance For Future (E3F) coalition — tend to be leading the way in shifting finance towards renewables.

But without clear and binding international rules, many ECAs cite their mandates as an excuse to continue financing fossil fuels. For example, the Export–Import Bank of the United States (EXIM) has justified continued oil and gas support under its “non-discrimination” clause, even though the US government under the Biden Administration has pledged to end international public finance for fossil fuels.

Global cooridnation

A fragmented policy landscape creates loopholes. When one country’s ECA pulls out of fossil fuel financing, others may step in to fill the gap.

This “free-rider” dynamic may weaken the impact of national-level climate commitments, and underscores the need for stronger international cooperation.

The most important global policy framework for ECAs is the OECD Arrangement on Officially Supported Export Credits, which already includes restrictions on coal financing. But negotiations to expand these rules to oil and gas have stalled, despite pressure from climate advocates and progressive governments.

Former US President Joe Biden’s administration attempted to push for stricter rules in late 2023 but failed to secure agreement from key countries like South Korea and Turkey, which is set to host COP31 - the next UN Climate Change Conference.

In our paper, we argue that reviving global dialogue on ECA climate policy beyond the OECD is crucial. Without a coordinated approach, fossil fuel-dependent economies will continue to resist change, and financing for clean energy will remain unevenly distributed.

Policy recommendations going forward

So, what can policymakers do to accelerate the transition? Here are three key recommendations:

1. Redefine ECA mandates: National governments should integrate climate and sustainability objectives into their ECA policies, ensuring that export finance aligns with broader climate commitments.

2. Expand international agreements: Strengthening the OECD Arrangement on Officially Supported Export Credits to include oil and gas restrictions would create a level playing field and prevent countries from undermining each other’s progress.

3. Improve financing mechanisms for developing countries: High capital costs and political risks make it difficult for emerging economies to attract clean energy investment. ECAs could help by offering financial support and lower-cost loans for renewable energy projects in developing countries.

Ultimately, ECAs are a powerful but underutilised tool in the fight against climate change.

If policymakers take bold action to reform export finance, these institutions could become catalysts for a just and rapid energy transition. But without stronger mandates and international cooperation, they risk being a barrier rather than a solution.

Applications

The impact of ECAs depends on whether governments align their mandates with climate goals.

Redirecting finance from fossil fuels to renewables, expanding support in developing economies, and strengthening international agreements, could make ECAs a driving force in decarbonisation.

This article is based on the original study “Quantifying the shift of public export finance from fossil fuels to renewable energy” published in Nature Communications in January 2025, co-authored by Philipp Censkowsky of HEC Lausanne, Paul Waidelich of ETH Zurich, Igor Shishlov of Perspectives Climate Group and HEC Paris, and Bjarne Steffen of ETH Zurich.

Igor Shishlov works for Perspectives Climate Group, where he previously conducted research on export credit agencies funded by Both ENDS, the European Climate Foundation, Oxfam America, and the Nordic Council of Ministers.

The US Government has released a new trove of documents on various cases of “Unidentified Anomalous Phenomena” (UAPs) – many of which would have been described in the past as Unidentified Flying Objects or UFOs – including photos, videos and reports of unexplained events sighted in the sky and in space.

The files detail “unresolved cases” where “the government is unable to make a definitive determination on the nature of the observed phenomena”.

As a researcher of military strategy, national security, and weapons and technology capabilities, I find several examples of UAPs intriguing in what they reveal and the questions they raise.

Taking this new release together with other reports from the past few years, a picture of what might be behind UAPs – and the current state of our understanding – begins to emerge.

The easy ones

Not everything in the new release seems inexplicable. Some images, like those that appear to show unidentified lights recorded by astronauts from the surface of the Moon, are most likely just visual noise or other image artefacts.

Astronauts have also reported seeing bright lights with the naked eye. These may be flashes from high-energy cosmic rays, which are more prevalent outside Earth’s protective magnetic field.

Likewise, video recordings showing bright lights zipping may be explained by insects flying by the camera at close proximity – they would be out of focus, and appear to move at high speeds.

Something is happening

Other cases are more difficult to immediately dismiss. Some recent examples demonstrate that something is occurring, even if we do not know what.

In 2020, the US Navy declassified three videos recorded by F/A-18 Super Hornets, showing mysterious “Tic Tac” objects flying in ways that defy current understanding of technology, without any obvious propulsion. The US Navy stated it did not know what the objects were.

Advanced sensors on fighter aircraft detected and tracked these phenomena, which suggests they were some kind of real objects rather than due to equipment errors or erroneous noise.

One of the most intriguing recordings was shared in a US congressional hearing in 2025. It appeared to be recorded by an MQ-9 Reaper drone, which was tracking a UAP.

The drone fired a Hellfire missile at the object and appeared to have successfully hit it. The object seemed to be deflected from its direction of travel momentarily, suggesting it was a real physical thing, but it appeared to suffer no damage and continued on its course.

Drone swarms and mystery objects

Over the past decade, there have also been multiple reports of unidentified groups of UAPs around US and European military bases.

In several cases, US Navy Destroyers apparently met mysterious “drone swarms”. While these may have been conventional drones, there were no apparent launch vessels nearby which could have allowed these relatively small drones (with presumably short range) to be where they were.

We also know that in 2023, the US used an F-22 fighter to shoot down a Chinese high-altitude spy balloon over the continental US. Another similar incident occurred over Hawaii the same year, although the US reportedly did not consider this one to be from China.

Also in 2023, the US engaged several other objects over North America, but both the US and Canadian governments have refused to provide any information on what they were.

So what exactly are these objects?

There is no easy explanation for these incidents.

Some leap to the idea that non-human intelligences are at work. However, there is no evidence for this. It may be fun to think of aliens or interdimensional beings, but this is not really a satisfying answer to the UAP question.

Perhaps the “best” explanation we have is drones, or other known technologies. This still seems partial, as some phenomena seem to exceed current technological capabilities, and it leaves open the question of who is behind the phenomena.

New technologies could be responsible. Perhaps operated by “friendly” forces – within the US military or allied defence manufacturers – testing their products against unknowing military operators to see how they respond. Similarly, the incidents may be tests carried out by adversaries such as China.

But still, some incidents are hard to explain given what we know about physics. The object in the “Tic Tac” videos don’t seem to behave how any kind of aircraft should, showing no signs of propulsion.

Alternatively, some UAPs could be as simple as malfunctions in sensor systems. However, this too seems partial – there are multiple cases of warplanes and warships detecting these objects with multiple sensors operating on different frequencies, both actively and passively.

Not aliens, but what?

The most recent release from the US does little to answer the questions about what UAPs are. This lack of answers is perhaps the most intriguing part.

Given the wide range of cases, there is likely no single explanation for all of them. Some seem likely to be drones and others likely image artefacts, but there is a real group of genuinely hard-to-identify phenomena.

Of the available explanations, non-human intelligence is perhaps the most entertaining – but also by far the least probable. It is far more likely that the cause of these incidents will eventually be identified much closer to home.

What does seem clear is that governments are watching closely, and with significant concern.

James Dwyer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

This week’s federal budget was meant to help tackle the cost-of-living crisis.

But Treasurer Jim Chalmers has done little to address a big out-of-pocket health cost millions of Australians face – dental care. This highlights the blind spot in the way successive governments think about oral health.

Yes, ongoing funding has been announced for two dental schemes – one for adults, the other for children.

These sound promising, until you dive into the details.

Read more: Urgent care clinics, medicines and vaccines: what the budget means for Australians’ health

What’s been announced for adults?

For the first time, the government will permanently fund the Public Dental Services for Adults agreement. This is where states and territories provide dental services to adults, usually those on a low income, in public dental clinics and dental hospitals.

This replaces a funding agreement with states and territories that started in 2012. This is when the Labor government agreed to provide A$345.9 million over three years to treat an additional 400,000 eligible adult public dental patients – generally low-income adults with a government concession card.

However, a change of government in 2013 saw changes to the agreement. This ultimately reduced the funding in 2017 to $107.8 million per year and has remained frozen at that level ever since.

The dental sector has been critical in the past of the one- and two-year extensions to the agreement, with the uncertainty placing pressure on public dental clinics and patients. So, this budget decision now to permanently fund public dental services is welcome.

But the real problem lies in the forward estimates. The budget projects ongoing funding of $107.8 million a year to 2029–30. That’s the same amount since 2017.

In that time, the Australian population has increased. Then there’s the impact of inflation. So in real terms, this amounts to a decrease in funding, for a larger pool of people who would potentially benefit. That potentially places even greater pressure on waiting lists.

Now we have a situation where many people are forced to wait months or even years to access basic and necessary dental treatment in the public system.

So many patients end up presenting to doctors or hospital emergency departments for their dental problems, other health issues linked to poor oral health (including diabetes and heart disease) worsen, and there’s a loss in productivity.

How about children?

The budget also announced extended access to the Child Dental Benefits Schedule to state and territory dental services, on an ongoing basis. This provides more certainty for families and providers.

This schedule currently provides $1,158 over two years per eligible child to receive basic dental care in either the public or private system.

But this is a demand-driven system, and fewer people than expected have used it since the scheme started. The actual spending has consistently fallen short of the $600 million that was originally budgeted in 2014–15.

This budget projects expenditure of around $330 million per year to 2029–30.

Given that fewer than 40% of eligible children each year access the scheme, there should be greater focus on measures that increase the uptake to improve early childhood oral health – including promoting the scheme to eligible families and streamlining the administration for both families and dental practitioners.

We need ambitious reform

This budget highlights a lack of appetite for the ambitious reform needed to improve access to dental care.

Australia’s National Oral Health Plan expired in 2024, and discussions for the next one are ongoing.

In 2021, the aged care royal commission recommended introducing a Senior Dental Benefits Scheme. In 2023, a Senate inquiry into dental services recommended expanding coverage under Medicare or a similar scheme for essential oral health care, over time, in stages.

Many in the dental profession and the broader community support these reforms. Yet we see no signs these recommendations will be implemented.

Matt Hopcraft was previously President and CEO of the Australian Dental Association Victorian Branch

Last night’s federal budget suggests an important step in Australia’s transition to cleaner energy and electric transport may be underway.

Spiking prices and geopolitical uncertainty in global oil markets show transport policy is no longer just about mobility or environmental issues. It’s also about energy.

Australia’s overwhelming dependence on imported fuels has left it vulnerable to the worst energy crisis on record. Leaders have scrambled to shore up scarce supplies of diesel while EV sales soared across Australia.

The 2026 budget has important investments in freight rail, walking and cycling and fuel supplies.

But there were big gaps too. There was little to boost the EV charger network or begin electrifying heavy vehicles. There was also no clear plan for how governments will replace fuel excise revenue as transport electrifies.

Overall, the budget continues the cautious and incremental shift towards electric transport, rather than hitting the accelerator.

EV transition and market maturity

If the government backs EVs, why is it dialling back tax incentives such as the Electric Car Discount, which helped accelerate their early uptake?

It’s because policymakers believe the EV market is maturing. Many more models have entered the market, cheaper models are available, ranges are longer and the secondhand market is growing. In April, sales of new battery EVs hit 16%. As markets mature, fewer incentives are needed.

Gaps around EV infrastructure

The budget included boosts for kerbside EV chargers and fleet electrification. These are welcome. But Australia will need significantly more infrastructure to support the mass uptake of electric transport.

Confidence in public chargers has to be higher. Millions of renters and apartment residents can’t charge at home. Drivers and companies have to be confident of stable policies to keep investing in EVs. In this respect, the budget was a missed opportunity.

Road funding and long-term reform

While the budget included support for the EV transition, it postponed the more difficult but vital conversations around how Australia will replace fuel excise revenue.

Next financial year, the government will get an estimated $28 billion from these taxes on liquid fuels. As more EVs appear, this revenue source will dwindle. This budget stops short of outlining a comprehensive long-term pathway.

The fairest replacement for fuel excise is to charge road users based on usage. This approach is highly sensitive, given cost-of-living pressures. But policymakers will not be able to avoid the question for too much longer.

Fuel security and resilience

Energy resilience was a key theme in this year’s budget, evident in the focus on securing fuel supplies and building more reliable supply chains.

There’s another welcome shift towards sustainable transport beyond EVs. This was clear in finding ways to send more freight by rail and ships through a $55 million pilot program.

The government announced $500 million for active transport such as walking and cycling. This is very significant.

The budget funded several big road and rail upgrades across Queensland, Western Australia and New South Wales. These include freight rail improvements, upgrades to industrial corridors and better connections to urban areas.

At the same time, the government’s decision to axe the Inland Rail project points to a continuing tension between long-term goals to boost rail freight and concerns around project costs.

Billions for city railways

One surprise announcement was $3.8 billion more for Melbourne’s Suburban Rail Loop. The funding will further embed the Commonwealth in one of the nation’s most ambitious – and controversial – transport projects. It’s now estimated to cost $34.5 billion.

The Victorian government wants the large new railway to boost connection between suburbs and increase urban development around the stations.

It’s reasonable to debate whether smaller-scale investments could deliver broader network benefits more quickly and at lower cost. But transformational projects such as this one are also intended to reshape land use, housing growth and make cities better connected. In practice, transport systems often require both incremental optimisation and selective long-term megaproject investment.

The road ahead

Transport is no longer simply about moving people and goods. This year’s budget makes clear transport is tied to economic resilience, energy security, productivity and long-term national sustainability.

The transition to electric transport is no longer a niche topic for environmentalists. It’s becoming a broader economic and strategic transition that will shape how Australians live, move, work and connect in the decades ahead.

The challenge for policymakers is to keep the transport transition moving – and to ensure it remains affordable, equitable and reliable. The public have to be confident in both transport infrastructure and government policy.

Hussein Dia receives funding from the Australian Research Council, the iMOVE Australia Cooperative Research Centre, Transport for New South Wales, Queensland Department of Transport and Main Roads, Victorian Department of Transport and Planning, and Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts.

US President Donald Trump’s visit to Beijing this week may ease tensions at the margins of the US–China rivalry. But it will not change a central fact: neither side can escape the rivalry, and neither side can decisively win it.

The biggest challenge for Trump and Chinese leader Xi Jinping is whether they can compete without turning the world’s most consequential bilateral relationship into its most dangerous one. A war is not inevitable.

If Washington and Beijing want to keep their competition peaceful, they must try to accomplish a few basic things:

• preserve military deterrence without turning it into provocation

• channel their rivalry into institutions and public goods, such as infrastructure development, rather than a military confrontation

• keep ideology from hardening every disagreement into a zero-sum struggle.

So, how can this be done?

1. Establish mutual restraint

Both countries will continue to build military capabilities and balance against each other. The danger comes when each side convinces itself that its actions are intended to deter hostilities, while the other interprets them as a provocation.

Nowhere is that danger greater than the impasse over Taiwan. For Beijing, Taiwan is a core sovereignty issue and a test of national resolve. For Washington, it is tied to US credibility as a security guarantor in the Indo-Pacific, regional stability, and its ability to deter coercive unification.

Both sides claim to be defending the status quo. Both believe the other is eroding it. And both are acting in ways that may be making the situation less stable.

The answer is not a unilateral concession by one side or the other. Rather, both sides need to establish mutual restraint, backed by clearer political reassurance.

For instance, China could reduce the scale and frequency of coercive military actions around Taiwan, such as military aircraft sorties, naval patrols and drone operations near the island. And the US could avoid steps that blur the line between support for Taiwan and support for formal independence.

Trust may be absent. But trust is not a precondition for stability. Clarity and restraint are.

This requires a serious framework for deterrence management, including:

• sustained efforts to clarify red lines

• reducing misperceptions about each other’s intentions and resolve

• preventing competitive signalling from spiralling into a confrontation.

During the Cold War, Washington and Moscow eventually learned that an arms race without guardrails was too dangerous to sustain. Washington and Beijing have not yet reached that level of strategic maturity. They need to.

Read more: Trump-Xi summit will be no ‘Nixon in China’ moment – that they are talking is enough for now

2. Compete in safer arenas

Rivalries can be channelled into forms that are less dangerous than military conflict, and can sometimes even be productive.

That is already happening. The United States and China are competing through global institutions and alignments, from the Quad and AUKUS (on the US side) to the BRICS and the Shanghai Cooperation Organisation (on China’s side).

Both are trying to shape the rules, memberships and agendas of the regional and global orders in ways that advance their own influence and constrain the other’s.

On the surface, this can look like just another front in a new cold war. But institutional competition can be one of the safer forms of rivalry.

Competition can force institutions to adapt rather than stagnate. It can encourage new forms of regional cooperation. It can also push rival powers to provide public goods – such as infrastructure, development financing, technological investments and climate initiatives – in order to win support from others.

In infrastructure financing, for instance, China has used the Belt and Road Initiative and the Asian Infrastructure Investment Bank to expand its reach globally. The US and its partners have responded with initiatives of their own.

The competition between the two has been beneficial – and it has expanded the options available to developing countries.

This is also why a rush toward broad economic decoupling would be such a mistake. Some restrictions in sensitive sectors may be unavoidable. But a sweeping effort to sever economic ties would remove one of the few remaining guardrails in the relationship.

As long as the United States and China remain economically intertwined, both sides are incentivised to maintain stability and avoid conflict.

3. Lower the temperature

The US and China are not simply clashing over interests. They also have very different political and historical narratives.

US policymakers often cast the rivalry as a defence of the liberal order against authoritarian revisionism. Chinese leaders often see it as a struggle against containment, humiliation and foreign interference.

These are not just different rhetorical narratives. They shape what each side sees as threatening, acceptable or beyond compromise. They also help explain why the relationship has become so emotionally and politically charged.

Ideological competition is safest when it remains indirect. Neither Washington nor Beijing is likely to convert the other to its way of thinking. And neither is likely to persuade the wider world through their lectures on ideology.

The sounder strategy is to compete by example.

For the United States, it means showing that democratic governance can still deliver competence, cohesion and long-term economic vitality. For China, it means showing that its model can bring growth, social stability and international cooperation.

Both sides also need to recognise that ideological overreach is dangerous. The more Washington frames competition as a global struggle between democracy and autocracy, the more it encourages Beijing to see compromise as capitulation.

And the more Beijing wraps its foreign policy in narratives of anti-hegemony, the more likely Washington is to see its own restraint as weakness.

Engagement still matters for the same reason. If the United States and China stop talking, this ideological competition will harden and become more dangerous.

The greatest danger in the US–China competition is that both sides will come to see restraint as weakness, compromise as surrender and coexistence as impossible. Once that happens, catastrophe becomes far more likely.

The most realistic goal is not friendship, or even reconciliation. It is something harder and more modest: competition without war.

Kai He receives funding from the Australian Research Council and the Toda Peace Institute, an independent institute in Japan promoting policy-oriented peace research. He serves as a non-resident senior research fellow at the Toda Peace Institute.

Huiyun Feng receives funding from Australia Research Council.

The federal government’s fifth budget contains major, controversial changes to the tax arrangements for housing. The government has argued that the changes will ensure young people will have better access to the housing market.

But Shadow Treasurer Tim Wilson says the Coalition is flatly opposed to the changes, accusing the government of intergenerational warfare.

Joining us on today’s podcast, Wilson said Labor hadn’t done enough to return the budget to surplus, despite its boasts of $64 billion in savings, including cuts to the National Disability Insurance Scheme (NDIS) and other programs:

This government has been dragged kicking and screaming to stop things like the fraud and corruption in the NDIS, the phantom children being enrolled in childcare services […] as well as of course the $15 billion given to organised crime through the [Construction Forestry and Maritime Employees Union].

This government does not respect Australian taxpayers, nor their money. And until you have that basic test of respect, you’re not going to get the budget back in surplus.

On opposing Labor’s tax changes, Wilson argued that’s because they would increase pressure on rents and “kneecap” young Australians who wanted to get ahead.

We absolutely believe that young Australians should be able to get into the housing market. The first place to start with that is not to put upward pressure on rents, because young Australians tend to rent before they, of course, go on and buy their first home. The government’s own budget documents say these tax changes will increase rents, so they’re going to take from young Australians even before they’re first home buyers.

[…] And then when they go and buy their first home, the government’s own budget documents say that these tax changes will lead to lower numbers of homes being built, 35,000 over the next decade.

[…] And the government own budget document say there’s going to be an overshoot on migration numbers, meaning higher demand. So lower supply, higher demand. It’s actually going to have the complete reverse effect in terms of reducing house prices, or making them more accessible for first home buyers.

[…] There are so many people in Australia who woke up, went to bed last night, thinking that they were in a country that actually encouraged and incentivised aspiration. And instead what we have now is a government that’s kneecapping young Australians who are putting their effort to get ahead.

On One Nation, Wilson said “parties of the fringe” sell people easy solutions and make selling traditional economics more diffcult:

I think that’s true of the extremist Greens, and of course you have other parties like [One Nation], who in a kind of pop consumer way think they can sell people anything without the consequences of government.

So yes, I do believe that the rise of parties of the fringe make it harder to sell mainstream messages. But that comes down to leadership, and giving people a sense of confidence about where we’re going and what we’re trying to build. I think the next election […] there’s going to a lot of stark choices.

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Health was at the heart of last year’s budget. Last night, tax and housing took centre stage, and there were few surprises in health.

Most new health funding goes to previous commitments and continuing programs, including big spending on public hospitals, the Pharmaceutical Benefits Scheme (PBS) and urgent care centres.

The government says this budget is about cost of living, spending restraint, and inter-generational fairness. That is reflected in funding health services that are free for patients, cutting private health insurance subsidies for older people, and cracking down on fraud and waste in Medicare billing.

Although there’s less new reform, there is new spending on prevention, and big changes in Health Minister Mark Butler’s other portfolios of disability and aged care, with big NDIS cuts and moves to expand and improve aged care.

Sustaining public hospitals, the PBS and other programs

This budget was much more about funding existing health services than reform.

The biggest spend is A$25 billion on public hospital funding over five years. This was baked in earlier this year, when the federal government agreed to increase its share of funding in a new five-year deal with the states.

Read more: The government has promised a $25 billion boost to hospital funding – but only hints at real reform

Adding new medicines to the PBS will cost $5.9 billion, including for chronic diseases such as arthritis, multiple sclerosis and some cancers, as well as COVID medications.

The National Mental Health and Suicide Prevention Agreement will be extended for another year. Last year, the Productivity Commission found the agreement was ineffective, and recommended an extension to provide more time to plan for the next one.

Funding for state public dental services for adults has been made ongoing, rather than year-to-year, along with access to the Child Dental Benefits Schedule for state and territory services.

But once again the government has declined to make the major reform – putting dental into Medicare – that’s needed to address what might be the worst cost of living challenge in health care.

There is money for infrastructure and services for Aboriginal Community Controlled Health Services, and replacing two Headspace centres with First Nations youth mental health services.

But there are no big boosts in expenditure on Aboriginal and Torres Strait Islander health care overall.

Making urgent care centres permanent

We already knew about $1.8 billion over five years to make urgent care clinics permanent. The 135 clinic pilot has quickly become a recognisable part of the health system.

The clinics are designed to provide timely treatment for urgent but not life-threatening conditions and take pressure off emergency departments.

They are providing timely, safe and effective care, and are popular with patients.

Read more: Can Urgent Care Clinics actually take pressure off hospitals? Yes, but they’re not the only way

But the evaluation of the pilot is not finished, and there are worrying signs about cost-effectiveness.

The interim evaluation suggests clinics have reduced nearby emergency department visits. But there is no evidence that emergency department wait times are improving, and the full cost of each avoided visit won’t be known until a final evaluation later this year.

The new funding must improve the model, not just extend it, with better information-sharing with GPs, improving triage so more patients are really avoiding the emergency department, and more after-hours care.

The government will also set up six new bulk-billing clinics, but hasn’t made the big changes needed to make funding fairer and to get more care into GP deserts.

Prevention

The budget includes $449 million over five years to add the respiratory syncytial virus (RSV) vaccine to the National Immunisation Program for people aged over 75 and Aboriginal and Torres Strait Islander people from age 60.

There is funding to address the falling rates of childhood vaccination, including through a childhood immunisation campaign, SMS reminders and by allowing pharmacists to vaccinate children under five.

Read more: What is RSV? And why should older Australians have this free vaccine?

There is also spending to continue cancer screening and prevention programs.

While these are all welcome investments, Australia still has a long way to go to catch up with how much other wealthy countries spending on prevention.

Savings

In keeping with the themes of inter-generational equity and fiscal discipline, there are some cuts.

Older Australians will no longer get more generous private health insurance rebates than younger Australians, saving $3 billion over four years. While some older people might reduce their coverage, the impact on overall coverage, and demand for public hospital care, is likely to be small.

A recent review found Medicare fraud and non-compliance could be costing $1.5–$3 billion a year. There are measures to combat this and save $674 million over four years.

Improvements to My Health Record, at a cost of $598 million, will reduce duplication of pathology testing, saving $146 million over two years.

Changes to the Extended Medicare Safety Net are expected to save $43 million over four years. The Extended Medicare Safety Net covers 80% of fees once people reach a threshold well above where the standard safety net kicks in. The cost of the program has been growing explosively, it may be leading to increased fees, and the benefits mostly go to wealthier people. Like previous budgets, this one has introduced caps on payments for a small number of items.

Seeds of future reform

This year’s national hospital funding deal committed to developing new ways to fund and deliver care. That is essential to slow down cost growth and free up funding for other types of health spending. The budget includes $19 million over five years for health agencies to do this work.

There is also $2 million for external advice to help the health department on how to tackle surging specialist fees – a top priority for Health Minister Mark Butler.

While this budget had little structural reform in health, these small investments might set up bigger changes in the future.

Read more: Specialist doctors are charging too much. 4 options to rein in excessive fees

Grattan Institute has been supported in its work by government, corporates, and philanthropic gifts. A full list of supporting organisations is published at www.grattan.edu.au.

The 2026 federal budget was delivered after a year of building expectations for bold reform.

Part of that buildup was last year’s economic reform roundtable. That highlighted a laundry list of “regulatory hairballs” from the Productivity Commission, as well as opportunities to boost tepid productivity growth by supporting new industries and technologies.

And part of the buildup was fuelled by the expectation that the government – with its strong majority – would be in the position to make some of the tough tax and spending choices previous governments have put off.

This opened the door to reforming a tax system that is less efficient, less fair and less sustainable than it should be.

Last night, the government delivered a broad and ambitious budget. It is meaningfully working its way through the to-do list for making Australia’s economy more dynamic and thereby more resilient. It tackles our largest spending pressures, and adapts our tax system to be less leaky and more sustainable.

Many of the measures were announced before budget night – lifting defence spending, reining in the National Disability Insurance Scheme (NDIS) and addressing fuel security, given the shock to global supplies caused by the Middle East war.

What remained was changes to the tax system, and how the measures together would shift Australia’s long-term budget trajectory.

Finally, tax reform worth writing about

The budget set its focus on Australia’s imbalanced personal income tax system, which leaves taxes on wages and salaries to do the heavy lifting, while granting generous concessions to income from wealth.

This has had implications both for the “horizontal equity” of the system – taxpayers with similar incomes often face very different tax bills – and for our housing system.

For years, it has been clear that the combination of a capital gains tax discount, along with the ability for property owners to deduct rental losses from wage and salary income (“negative gearing”), had given highly leveraged property investors a leg-up in the housing market.

Last night, Treasury gave us yet more evidence of this.

Analysis of tax data showed that the top 1% of income earners (with incomes of around $800,000 per year) over their working lives have received an average benefit of more than A$700,000 since 2000. This compared to a benefit of just $12,400 for the typical income earner, who earns around $62,000 per year.

The government’s reforms seek to wind back these expensive concessions. Importantly, a minimum tax rate of 30% will be applied both to future capital gains, and to distributions from trusts, with some exceptions (such as for farmers). This removes avenues used by many wealthier taxpayers to reduce their tax bill.

For younger Australians, this means there may be fewer investors competing at auctions after budget night.

Notably, while the capital gain changes do not begin until 2027, they will apply to all gains from that date, meaning existing investments are not fully “grandfathered” – or allowed to follow old rules. This increases the revenue raised by the proposal, and avoids unfairly locking in tax benefits for the current cohort of investors.

While existing negatively geared investments are fully grandfathered, the reforms to the capital gains discount are likely to reduce the incentive to hold onto these loss-making properties regardless.

The revenue raised by these policies is small to begin with, but within a decade we estimate they will reduce the deficit by more than $20 billion per year.

By contrast, the impact on property prices is likely to be muted, with Treasury estimating prices will be 2% lower than otherwise. This is largely because the decrease in investor demand will be offset by an increase in purchases by homeowners – shifting the composition of property ownership.

Supply is still critical

However, this budget’s real legacy on housing will be defined by its attempts to boost housing supply.

Treasury estimates these tax changes will lead to 35,000 fewer homes being built over the next decade. But this is balanced out by other policies, such as a new $2 billion Local Infrastructure Fund. This will pay the states to loosen restrictive planning laws and boost construction productivity.

This is critical. As Grattan’s previous research has shown, planning reforms to unlock more well-located homes have the potential to boost housing construction by more than 60,000 homes each year, while also enabling more vibrant cities that support a more dynamic economy.

A quiet night for government spending

By contrast, the expenditure side of the budget was more subdued. In light of rising demand for social services, and with inflation forecast to rise to 5% this year due to higher fuel prices, spending restraint was the order of the day.

The government has made savings across a wide range of areas, from a reformed electric vehicle tax discount to lower private health insurance rebates, and pulling back tax credits and uncommitted funding set aside for clean industries.

Read more: At a glance: budget 2026

By far the biggest saving in this budget was the decision to slash the growth of the NDIS to an average 2% over the next four years. This measure is worth more than $36 billion over that period, comfortably eclipsing the overall improvement in the budget deficit of just over $26 billion.

And these savings are projected to continue to grow, reaching about 0.5% of GDP by 2035. According to Treasury’s projections, this alone is enough to push the budget into surplus by the mid-2030s, an improvement from the decade of deficits projected in last December’s mid-year update.

Limited cost-of-living support

But this budget was also defined by what the government chose not to do. Despite growing concerns about the impacts from the fuel crisis, the government did not roll out additional cost-of-living relief, and it wisely did not extend the fuel excise cut.

While that helped keep spending in check, it also left families on working-age welfare payments – who have long needed additional support – out in the cold.

Fundamentally, intergenerational fairness requires governments to take responsibility for the long-term outcomes of today’s choices, even if those choices create short-term losers.

This budget starts to tilt the balance in favour of younger, working Australians trying to buy their first home. It was worth the wait.

Read more: A budget with a bundle of reforms in a time of ‘extreme uncertainty’

The Grattan Institute began with contributions to its endowment of $15 million from each of the federal and Victorian governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute’s board controls this endowment. The funds are invested and contribute to funding Grattan Institute's activities. Grattan Institute also receives funding from corporates, foundations, and individuals to support its general activities as disclosed on its website.