Treasurer Jim Chalmers has declared “no other budget in the 2000s has set out this much responsible budget repair and this much economic reform.”

Despite his claims, Tuesday night’s budget remains highly contentious – especially Labor abandoning its election commitments not to change capital gains tax discount and negative gearing.

The treasurer joined us on the podcast to explain and defend his fifth budget.

Expanding on his budget night statement about wanting to “rebalance a system which is more generous to assets than it is to labour”, Chalmers said he had deliberately created “new architecture” to give more options for providing future tax cuts.

The intention there is to give future governments the option to provide tax relief the usual way […] cutting rates and thresholds. Or cutting taxes specifically for workers via this new architecture, the [$250] Working Australians Tax Offset.

[…] I think I’ve demonstrated an enthusiasm to return bracket creep and cut income taxes where we can afford to do that. And this will provide another way in the future that governments can do that if they wish.

[…] Well, certainly we are in the cart for more tax relief when the budget can carry that, when the budget can afford that. We’ve made that really clear. Even in some of the budget documents we made it clear that one of the benefits of getting the medium-term fiscal position in much better condition is that it will provide room down the track for more tax relief.

‘Downward pressure on rents’

Asked about budget forecasts that the new housing tax changes will lead to a small rise in rent and a projected reduction in the number of new houses, Chalmers said the whole budget told a different story.

Some of those model outcomes that you’re referring to refer very specifically to and narrowly to the tax changes, and not the housing package in its entirety. And so once you look at the all of the housing policies in the budget that we released, we expect there to be about 30,000 additional homes. And when you’re building 30,000 additional homes, you will put downward pressure on rents.

In addition to that, there’s a lot of national competition policy and other policy that we’re doing with the states, which is about speeding up approvals and having more land release. So that could mean tens of thousands more homes as well. So all told, the budget in its entirety has a positive impact on housing supply.

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Read more: Politics with Michelle Grattan: Tim Wilson on the budget’s hidden hits on young Australians

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Ongoing shocks from the Middle East

On the war in the Middle East, Chalmers said it still keeps him up at night.

I still lose a lot of sleep over developments in the Middle East is the truth of it. And that’s because, you know, we have no say in when the war will end or how long the consequences will linger for.

[…] I am extremely worried about it. The consequences in our economy from the war in the Middle East are already serious, and they still risk becoming severe.

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Read more: At a glance: budget 2026

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‘Paying a price’ for broken election promises

Chalmers acknowledged the government will pay a political price for breaking its pre-election pledges not to change negative gearing and capital gains tax. But he said he stands by the housing tax choices the government has just made.

The comments and commitments that we made at the election genuinely reflected the policy that we had, the overwhelming focus on [housing] supply. Now, the big choice that we have to make in the budget […] is the choice between doing something easier, which would have been to leave it untouched – but something which became increasingly clear to us wasn’t the right way to go. Because the longer we left it, the more people would be locked out of the market.

We didn’t want to leave to some future generation to fix this problem, which is intensifying. And so we took a decision which is hard in political terms. We will pay a price for it in political terms, I think. But what matters more than that is to get the substance of it right.

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.

For many in the West, China still feels hard to fully understand. Public debate and media coverage too often focus on the “China threat”. Critics highlight the flaws of China’s political system and limits on freedom, yet China has still managed to rise as a major power that can now compete with the United States.

One reason for this gap in understanding is that the media often interprets China through a Western-centric perspective.

US President Donald Trump’s summit with Chinese leader Xi Jinping this week, for instance, will be analysed in the West very differently from the way it will be seen in China. Xi’s language will be parsed and scrutinised for couched messages, veiled threats and hidden meanings.

But analysts may be missing some of the tools China uses to explain and justify its actions.

My co-authored new research offers a new way to look at China’s grand strategy: by analysing the way the government uses storytelling. My research partners and I are part of a growing group of scholars looking at how geopolitics is becoming a contest of narratives – how states tell stories about themselves and each other.

To do this, we studied four major speeches by Xi from 2021–23. We read them as stories and dissected the narratives – as well as the characters and language – to better understand the meaning behind the words.

Why narrative in politics matters

The use of political narratives by leaders is not new.

In ancient Athens and Rome, politicians relied on strong public rhetoric to persuade people. Aristotle described three key elements of persuasion in rhetoric: logic (logos), emotional appeal (pathos), and the speaker’s credibility (ethos).

Modern theorists like Kenneth Burke argue rhetoric creates a sense of shared purpose between leaders and the public, but it can also create division between groups.

And communications scholar Michael Kent identifies 20 master “plots” that have been used by storytellers for thousands of years to craft effective narratives. These include: quest, adventure, pursuit, transformation, revenge, sacrifice, discovery and of course love.

My research partners and I used these plot devices to analyse Xi’s speeches to see how he communicates – and tells stories – about China’s strategies.

The plot devices in Xi’s speeches

We found several master plots that consistently shape China’s official stories:

Adventure

In the Chinese Communist Party’s 100th anniversary speech in 2021, Xi said:

To save the nation from peril, the Chinese people put up a courageous fight. As noble-minded patriots sought to pull the nation together.

This storyline frames China as a nation on a long journey towards strength and prosperity, marked by setbacks and breakthroughs. This is seen as a type of political adventure. This narrative also appeals to shared memories in China of hardship and endurance.

Quest

Xi’s speeches also described a quest – the nation’s striving towards a difficult goal, under the leadership of the Chinese Communist Party (CCP).

In Xi’s 20th Party Congress report in 2022, he said:

There has never been an instruction manual or ready-made solution for the Chinese people and the Chinese nation to turn to […] as they moved on toward the bright future of rejuvenation.

The message is intended to inspire unity, patriotism and pride among Chinese listeners.

Transformation

In his 14th National People’s Congress speech in 2023, Xi said:

The Chinese nation has achieved the great transformation from standing up and growing prosperous to becoming strong, and China’s national rejuvenation has become a historical inevitability.

Transformation stories describe not just change, but growth and renewal. This narrative presents China’s rise as a natural evolution built on decades of reform and sacrifice.

Rivalry

Rivalry stories tend to feature internal and external threats.

In two of the speeches we studied, Xi refers to efforts by foreign powers to “blackmail, contain, blockade, and exert maximum pressure on China,” and recalls a past when foreign bullying caused “great suffering”.

In the CCP’s 100th anniversary speech, Xi also said:

Anyone who would attempt to do so will find themselves on a collision course with a great wall of steel forged by over 1.4 billion Chinese people.

These storylines reinforce the idea that China must remain vigilant and united against outside pressure.

Love

Xi doesn’t refer to a romantic-type of love story in his speeches; rather, he speaks of the dedication and loyalty of the Communist Party’s supporters.

In the 100th anniversary speech, for instance, Xi said:

And I would like to express my heartfelt gratitude to people and friends from around the world who have shown friendship to the Chinese people and understanding and support for China’s endeavours in revolution, development and reform.

How audiences see these messages

The impact of this messaging is strong at home. It’s often reinforced through state media, cultural products and patriotic education to reach as wide an audience as possible.

The frequent contrast between past suffering and present strength encourages the public to see China as a peaceful but firm global actor.

For a foreign audience, this storytelling can help other countries interpret China’s actions and anticipate its responses.

For example, China’s narratives about past humiliation and the need to defend its sovereignty help explain its strong stance on Taiwan – and the Communist Party’s legitimacy on this issue in the eyes of the people.

But this does not mean a military conflict is inevitable. Any future military action over Taiwan would depend on a multitude of factors, including careful calculations of risk, China’s economic interdependence with the world, and the potentially catastrophic consequences for the region and its people.

This cannot be easily conveyed in storytelling, which is why we can’t rely on this device alone to explain China’s actions. But it does give us a window into leadership’s thinking – and in a political system like China’s, this is vital.

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The author would like to acknowledge her co-researchers on the project: Mitchell Hobbs of the University of Sydney (project lead), and Zhao Alexandre Huang and Lucile Desmoulins of Gustave Eiffel University, France.

This piece is based on the author's contribution to a research project funded by the Australia-France Social Science Collaborative Research Program from the Academy of Social Sciences in Australia.

In March, a major independent report commissioned by the federal government declared Australia’s research and innovation system was “broken”. The report, titled Ambitious Australia, recommended how to fix it.

The 2026 federal budget gives us the first concrete signal of how the federal government intends to act on the report’s recommendations.

This signal is a quiet one, despite there being some welcome commitments. It is not quite the kind of renewal many in the research sector might have hoped for after years of reviews, uncertainty and declining confidence in national research settings.

Let’s dig into the details.

Looks good at first glance

At first glance, some headline numbers in the budget look constructive.

For example, the government says it will “[strengthen] our science capabilities and institutions” via new investments. There is $387 million over four years for the CSIRO. There is also $273 million for the National Measurement Institute, $21.7 million for the Australian Space Agency, and $24.3 million over two years for the National Health and Medical Research Council (NHMRC).

The government has also committed to establishing a National Resilience and Science Council. This was one of the main recommendations of the Ambitious Australia report. The council will provide coordinated advice on research, development and innovation investment. It will also help set priorities for $15 billion worth of funding in this area.

This is a logical policy direction. It may reduce fragmentation and help connect public research to national industrial capability.

The Medical Research Future Fund disbursement cap will progressively lift toward $1 billion per year by 2030–31. This removes an artificially imposed budget measure, which many have called for, and will allow significant extra funding to flow to health and medical researchers.

Subject to treaty negotiations, the government will also provide funding for Australia to join Horizon Europe as an associate member. Horizon Europe is the European Union’s flagship research funding scheme. Associate membership would allow Australian researchers to lead projects and directly access an additional tier of funding to complement our domestic funding schemes.

Not a broad expansion of research

These commitments are real and welcome. They support public science capability that Australia needs. But they are largely institutional life-support measures. They are not a broad expansion of competitive, investigator-led fundamental research.

For example, the Ambitious Australia report recommended that Australian Research Council and NHMRC funding allocations be returned to historical levels, reversing what it documented as a 19% real decline over 12 years, and properly indexed.

That recommendation is not yet adopted in this budget.

Some of the commitments in the budget are also, on closer reading, essentially a redistribution rather than an expansion of public investment in research.

Take the measure referred to as “Boosting Productivity – Promoting Research, Development and Innovation”. This is partially funded by returning $800 million of uncommitted funding from Australia’s Economic Accelerator over five years, with a further $1.4 billion in savings booked between 2030–31 and 2036–37.

Established in 2022, Australia’s Economic Accelerator was a program designed to bridge a gap between publicly funded university research and commercialisation. Scaling that back, in the same measure that funds science agencies within the Department of Industry, Science and Resources, is representative of the government’s apparent focus shift from competitive, university-administered research funding and toward agency-based applied science.

This strategic shift is further emphasised by the choice of instrument for stimulating private R&D investment.

The government seeks to unlock $400 million per year in additional R&D investment by young firms through increased tax offsets.

But that figure is a behavioural estimate, not a committed R&D outlay. It rests on assumptions about how Australian industry may respond to increased tax offsets. And historically, Australia’s business expenditure on R&D as a share of GDP has been persistently below the OECD average since at least the early 2000s.

There are many cultural and structural reasons for that. An offset adjustment is unlikely to be a silver-bullet resolution to them on its own.

Finally, one of the more low-key and curious inclusions in the budget notes that work is “progressing to reform registration requirements so that universities can achieve research specialisation in chosen areas of focus”.

It describes it as a process that will redirect non-research-intensive disciplines and/or institutions toward teaching. It seems to forecast consolidating R&D investment at fewer, larger institutions.

This could benefit Australia’s leading research intensive universities that form what’s known as the Group of Eight. But it could potentially harm mid-tier research active universities and their emerging academics building research programs across the country.

A holding pattern

This budget is a holding pattern for fundamental research in Australia. It keeps the lights on for agency-based science, doubles down on driving business R&D, and defers structural decisions about university research funding to a future date.

In a chaotic global environment being shaped daily by oil market shocks, none of these choices are unreasonable.

They do, however, leave Australia’s fundamental research system in a state of policy suspension at a moment when the report commissioned to examine it explicitly recommended decisive action.

The question is no longer what the Ambitious Australia report said. It is whether or when the government intends to act on it.

Nathan Garland receives funding from the Queensland Government.

Paramedics face the threat of violence every day.

Just this past month, two Victorian paramedics were assaulted. One was stabbed and another pregnant paramedic punched after saving a patient’s life.

Authorities warn these incidents are part of an “appalling trend” of escalating violence against paramedics.

And they’re a reminder that violence against paramedics is not a rare or unpredictable event, but a routine occupational risk. And research suggests this risk is rising.

So what makes their job so dangerous? And how can we better protect them?

A dangerous profession

Research shows paramedics face some of the highest rates of workplace violence of any profession.

One Australian study found nearly 90% of paramedics have experienced workplace violence while delivering care. Verbal abuse is the most common kind, followed by intimidation, physical abuse, sexual harassment and sexual assault.

Paramedics may also be attacked with weapons, including knives and box cutters. Though less common, these acts of violence put paramedics at much greater risk of serious injury or even death.

Paramedics are frequently exposed to other risks, such as dog attacks and car accidents. They are also more likely to be trapped in unsafe private or public spaces, such as when attending domestic violence scenes.

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Read more: Paramedics have one of Australia’s most dangerous jobs — and not just because of the trauma they witness

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Research suggests violence against paramedics is becoming more common around the world. In Victoria, one paramedic is assaulted every 15 hours on average. And in 2024–25 alone, Ambulance Victoria recorded 1,045 occupational violence incidents — equivalent to almost 17 incidents for every 100 staff.

Research shows female paramedics experience higher rates of occupational violence, particularly sexual harassment and intimidation. Given female paramedics make up just over half of the ambulance workforce, this is an urgent safety issue.

What’s behind this trend?

Research suggests there are multiple factors driving the surge in violence against paramedics.

One is the high rate of alcohol and drug abuse. Researchers observe a strong link between substance abuse and violent incidents against paramedics, particularly in overdose and emergency mental health cases.

Another factor is system pressures, such as long ambulance response times and crowded emergency departments. These pressures can make patients, family members and bystanders more agitated, and more likely to lash out at paramedics. Due to workforce shortages in some areas, paramedics may also be forced to treat complex cases or arrive at volatile scenes alone. This leaves them even more vulnerable to assault and other acts of violence.

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Read more: Bad for patients, bad for paramedics: ambulance ramping is a symptom of a health system in distress

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Not just physical violence

These violent incidents take an immense psychological toll on paramedics. Research shows workplace violence is a key driver of burnout, anxiety and post traumatic stress disorder among paramedics.

Paramedics are also feeling less safe while on the job. A recent trial required New South Wales paramedics to wear body cameras while delivering care. It found frequent exposure to violence had a significant impact on how safe paramedics felt and how emotionally exhausted they were. Participants were also more likely to consider stepping back from frontline roles, or leaving the workforce altogether.

So protecting paramedics is not just about preventing harm, but also retaining a vital part of our emergency workforce.

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Read more: Paramedics need more support to deal with daily trauma

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So, what needs to change?

To keep our paramedics safe, governments should:

• strengthen legal protections for paramedics, by ensuring assaults carry meaningful, enforceable penalties and intoxication or mental health crises are not routinely used to excuse violence

• train paramedics to de-escalate volatile situations, assess risks and deliver trauma-informed care, and make this training continuous instead of a once-off

• improve communication between paramedics, police and hospitals, to ensure key information gets to ambulance crews before they arrive at a scene

• establish a national database recording the prevalence and patterns of violence against paramedics, including incidents targeting students and early-career staff.

Ambulance services must also:

• provide ambulance services with better lighting, real-time communication systems and security personnel particularly when transferring patients to hospital

• foster a workplace culture where reporting violence is encouraged and taken seriously, not dismissed as “part of the job”.

The public can also help protect our paramedics by:

• staying calm and giving paramedics space to do their job

• following instructions from paramedics

• discouraging aggressive behaviour from others

• calling triple-0 if violence is escalating, so police can be sent in to support paramedics.

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Read more: The Bondi Beach terror attack mobilised a team of volunteer medics. Here’s what we learned

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The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

From live speech translation in video calls to auto-dubbing on TikTok, the technology to dissolve language barriers has arrived. Real-time translation powered by artificial intelligence (AI) is now embedded in everyday life.

Tools from OpenAI, Meta, Google and many others now offer near-instant translation across dozens of languages, and they keep improving.

All this raises a vital question. If machines can do this faster and more accurately than humans, is investing years in learning another language still worth it?

The logic is appealing. Humans have always offloaded cognitive work onto tools. Writing reduced demands on our memory. Calculators removed the burden of mental arithmetic. AI sits within this long tradition. Used well, it can support learning and expand access in ways that matter enormously.

But there’s a difference between using a tool to extend your capabilities and using it to avoid doing something altogether. That distinction becomes important when you are not just replacing a skill, but a form of cognitive and cultural engagement.

The effort is the point

Effort plays a central role in how we acquire knowledge.

Psychologists use the phrase “desirable difficulties” to describe challenges that may feel inefficient, but produce stronger long-term retention and understanding.

Struggling with grammar, searching for the right word, or constructing meaning across multiple languages engages brain networks that support memory, attention and cognitive flexibility. Over time, they consolidate knowledge far more deeply than passive exposure.

Sustained mental engagement contributes to what researchers call cognitive resilience – the brain’s capacity to maintain function as we age. Managing multiple languages is one form of this engagement. It requires the brain to resolve competition, monitor context and adapt dynamically.

These are not trivial demands. And they’re difficult to achieve if you just use translation tools passively, such as resolving the meaning of a foreign phrase with the click of a button.

What multilingualism research actually shows

The evidence on multilingualism is often presented as a simple “bilingual advantage”, a shorthand that obscures a more complicated picture. Some studies report benefits for attention or working memory, while others find no differences. The truth appears to be more selective.

Our recent study examined cognitive performance in 94 adults aged 18 to 83, using both visuospatial and auditory tasks across working memory, attention and inhibition. Put simply, we looked at how people process and respond to information they see or mentally map out in space (visuospatial) and information they hear (auditory). Examples include remembering sounds, focusing on visual patterns, or ignoring distractions.

Our study measured multilingualism as a spectrum, not a category. This allowed us to capture diverse language backgrounds and experiences. Multilingual participants spoke a range of languages with varying levels of proficiency and daily use, reflecting the linguistic diversity common within multicultural communities.

Across most tasks, multilinguals and monolinguals performed similarly. However, one pattern was striking. Individuals with richer, more diverse multilingual experience showed markedly better performance in visuospatial working memory. These effects were most pronounced in older people.

This suggests that multilingual experience doesn’t broadly enhance cognition, like some headlines claim. Instead, it may help preserve specific functions over time.

Separate population-level research has also linked multilingualism to later onset of Alzheimer’s disease and better overall ageing outcomes, though the mechanisms continue to be debated.

Overall, however, it appears that sustained use of multiple languages represents a form of mental activity with effects that accumulate across a lifetime.

What AI translation can’t replicate

AI translation excels at speed and accessibility. For many practical purposes, it works remarkably well. But it operates through pattern recognition, not lived understanding. It can struggle with cultural context, humour, register and emotionally embedded meaning, especially for languages with less representation in training data.

At best, AI captures literal dimensions of language while missing social ones. Consider the scene in the 2003 film Love Actually where Jamie, played by Colin Firth, delivers an awkward but sincere proposal to Aurelia in broken Portuguese.

It is moving because of the effort, vulnerability and intent his imperfect words carry. Resort to real-time translation software and what remains is information, not expression.

This is the deeper distinction: translation is not the same as participation. Learning a language involves understanding how people think, their values, and how meaning is shaped by context and history. This cultural literacy develops through interaction and experience. We can’t fully outsource that to systems that translate on demand.

The multilingual participants in our research spoke to this directly:

I definitely think in Telugu, but I remember numbers and count using English.

Afrikaans is the language of my heart and best used to express intense emotion. English is the language of business and used mostly in everyday life.

These are not descriptions of switching between translation modes. They are descriptions of inhabiting different selves.

AI will continue to change how we engage with language learning. It can personalise instruction, minimise barriers and provide feedback at scale. What it can’t do is replace the cognitive and cultural work that comes from learning a language. This work leads to a deeper relationship with how other people see the world, and with how you express yourself. And that difference still matters.

Olivia Maurice completed her PhD at the MARCS Institute, Western Sydney University.

Mark Antoniou receives funding from the Australian Research Council.

Western imperialism has a long history in the Philippines. Hundreds of years of Spanish colonisation, beginning in the 1500s, culminated in the Spanish-American War in 1897. The first attempt to declare the Philippine Republic in 1899 was followed by the Philippine-American War (1899-1902), then American control, Japanese occupation during World War II, and eventual independence in 1946.

This history of subjugation, and the subversion and trauma it elicits, is so complex that any linear narrative sanitises and abstracts it to the point that it becomes meaningless.

My opening paragraph fails to describe the brutality of this history and the countless incidents that propelled it. Detailed as a simple timeline, it is as if I’m outlining geological epochs. Missing is the human toll, the centuries of cultural mutilation, the violence and political interference, and the dysfunctional, corrupt politics this long history leaves in its wake.

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Review: Yñiga – Glenn Diaz (Pink Shorts Press)

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Glenn Diaz is keenly aware of the sanitising nature of linear histories. His award-winning novel Yñiga resists that approach. It is composed as a series of disjointed scenes, jumping around in time within chapters, and sometimes within paragraphs, to capture the essence of memory and trauma.

The novel tells the fragmented story of Yñiga Calinauan, who returns to her home town, where she is forced to reengage with her family history. But it begins with the arrest of a retired general, who has been hiding out in Yñiga’s neighbourhood in Manila.

After the arrest, the neighbourhood is set alight. There is suspicion among the neighbours. Was the fire caused by a forgotten cigarette? Did it have something to do with the general’s arrest? Did Yñiga tip off the authorities and bring on the wrath of whatever corruption supported the general?

Regardless of the motivation, Yñiga is made homeless. Arriving in her childhood town, she reunites with her sister and a helper, Marco, who is later revealed to be her half-brother. Marco is organising a protest against a new power plant, taking after his and Yñiga’s activist father, who had been “disappeared” under the corrupt and dictatorial regime of Ferdinand Marcos. After Marco and Yñiga participate in the protest, Marco is kidnapped.

Throughout the novel, there are flashbacks to interviews between Yñiga and a man who is writing a biography of Yñiga’s father. We never get the exact reasons for the biography, or the biographer’s motivation. But Yñiga is suspicious throughout the process, questioning her father’s disappearance and noticing details about the biographer that link him to the army.

There are suggestions of sex in each of the scenes with Yñiga and the biographer, intermixed with flashbacks to sexual encounters with a previous lover, Diego. There is an ambiguity that declines as the novel progresses – was Yñiga having an affair with the biographer or Diego, or both? Why?

The novel is laced with references to specific CIA operations, such as the psychological warfare intended to quell the Hukbalahap “Huk” Rebellion (1946-54) in the early years of independence, the lie the CIA put out that MSG makes you sleepy, and many others.

There are also references to Spanish colonisation, represented by the lighthouses that began construction at the end of Spanish rule and continued under the Americans. The signs of neo-colonialism are evident in the ubiquitous presence of Coca-Cola and the fact that Yñiga earns money writing essays for lazy Western undergraduates. The deadline for a paper on the CIA in Southeast Asia looms over the text.

An allegory of resistance

The novel jumps between minor and major storylines: the protest, the subsequent arrests, incidents before the neighbourhood fire, Yñiga’s encounters with the biographer.

Toward the end, while she is pamphleting for a sit-in in response to the arrest of her comrades, Yñiga runs into a boatman she met earlier in the narrative. As she recounts the reasons for protest and the long list of incidents that led to the arrests, she is overwhelmed. When she reflects on her factual recounting, she notices “the storyline sounded almost clinical, academic, defanged of the pain and wretched violence to which it tried to give shape”.

Although the novel ends on a somewhat hopeful note, a close reading reveals Yñiga’s suspicion of the futility to her struggle, and perhaps the wider struggle of resistance in the Philippines.

In the final chapter, the story flashes back to an incident in Yñiga’s childhood when she was forced to play the traditional Filipino game of hampas-palayok, which has its origins in the Spanish piñata. The adults push her into the square where the claypot piñata hangs. She swings and turns, missing the pot each time, egged on by the adults.

When her blindfold is taken off, a mass of laughter comes up from the crowd. She is embarrassed and ashamed at “the feeling of maniacally swinging a wooden bat in the laughing wind”.

The scene reads as an allegory of the resistance. Yñiga is playing a game introduced by the Spanish, blindfolded, too young to possess the coordination to be done with the clay pot, turned in every direction by her community, swinging her bat and missing. There is hope in the sections that follow, which is necessary for any useful writing about political struggles. Yet I can’t help but feel that Diaz could have ended the novel with Yñiga’s rumination on the laughing wind.

I am taken aback at the force of Yñiga. I have focused on its political aspects, but its artistry is in its composition. Rarely is this kind of disjointed technique deployed to meaningful effect in contemporary literature, where it often reads as an unnecessary reaching for some kind of artificial cultural value. In Yñiga, Diaz gives readers a glimpse into his country’s history in the only way that would do it justice.

Well done to the publisher, Pink Shorts Press, for bringing this powerful novel to Australia, a country that refuses to reckon with its own vicious colonial past and its complicity in Amercia’s global crusade of political interference and oppression. It’s important that these stories are told, and told well.

Sam Ryan 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.

Images of the sleek keels, elegant planks, and dragon-headed prows of Viking longships have been reproduced countless times on postcards, book covers, souvenirs and in television shows and movies.

These vessels are, quite literally, the poster-ships for the Viking Age, which was between around 750 and 1100 CE.

So what made these ships so special? And why were these advanced shipbuilding techniques so crucial to the Vikings’ success?

What drove this shipbuilding boom?

In Old Norse, there are two words for Viking: víkingr refers to a person, while víking is an activity. Neither word is inherently negative nor associated with violence.

A víkingr is someone (who may or may not identify as a pirate) who undertakes víking expeditions (sometimes to pillage, sometimes not), and whose life and livelihood have strong connections to the sea.

By the mid-eighth century, these people were keen to expand their horizons and branch out from local economies.

This coincided with a number of large and lucrative mercantile towns springing up around north-west Europe in this period.

Among other factors, Vikings travelled further westward and eastward as part of an ongoing and complex power grab for portable wealth, territory, and control of trade routes.

From the 750s on, the Vikings’ advanced shipbuilding technology helped give them the edge.

Gamechanging technology

The unique design of Viking ships and their trademark square sails were absolute gamechangers in this period.

There are many different types of Viking ship, but the most relevant here are the langskip (longship) and knörr (cargo ship).

Like all Viking vessels, these are clinker built. That means the hull’s long, curved sides are assembled out of slightly overlapping planks, and are held together by iron nails (the “clinkers”).

Along with their strong but slender keels and stems, this innovative construction made for incredibly flexible, light, and sinuous vehicles that could be powered by oars or by sail and withstand wild ocean swells.

With their narrow silhouettes and their ability to gently twist and yield to the waves, it’s no wonder longships were called snekkja (serpents), dreki (dragons) and skeið (sliders).

Another small but significant improvement that made longer-distance travel possible was the oar-hole.

Until the early Viking Age, pegs called tholepins stuck up from the gunwales (upper rim of the boat) to hold oars in place and act as fulcrums for rowing. This meant ships’ sides could never be very high above the water. (Imagine trying to row with your oar at head height.)

But by cutting holes through the side planks, which could be plugged when the oars were shipped and the sail raised, it became possible to build taller, more seaworthy ships.

The boats had shallow drafts (meaning not much of it was under the waterline). This enabled these “sea-snakes” to slither further inland than ever before, since they could tackle riverways other boats simply couldn’t navigate. They could also be dragged across land.

Longships also had symmetrical prows (meaning the “back” of the boat was just as high as the “front”).

This design allowed Viking raiders to pull right up on the riverbank, then “hit and run” – without all the slow awkwardness of reversing and turning the whole boat around for the getaway.

Square sails also increased both the distance and speed of Viking travel. Norse explorers like Eirik rauða (“the Red”) and his son Leif (who went to North America nearly 500 years before Columbus) wouldn’t have taken a warship to Iceland or Greenland.

Instead, they probably kitted out a knörr, a heavy-bellied merchant ship much like the one described in an ancient Icelandic text called Egil’s saga

richly painted above the plumbline and fitted with a black-and-red sail […] loaded with stockfish, hides and ermine, and a great quantity of squirrel skins and other furs […] a very valuable cargo.

When powered by four oars, a modern reconstruction of just such a knörr reached a speed of 1.5 knots. With the sail raised it sped along at 13 knots (around 24 km an hour).

A much larger longship with 60 oars could row at 4.5 knots and reach a maximum sailing speed of 17 knots (31.5 km an hour)!

Crafted by hand

The most impressive stats about Viking ships aren’t about how fast or far they went, but rather how much time, effort, and natural resources went into building them. The sheer industry of it all is astonishing.

Every piece was crafted by hand. Axes shaped the floor timbers, planking, masts and beams.

Dozens of oak trees (8-10 metres long and at least a metre across) went into the hull. Dozens more pine trees were burnt to make tar for sealing the wood (600 litres for a 60-oar longship, which took more than 2,000 hours to produce).

More pine and alderwood went into the oars and mast.

Then there’s all the iron: 450kg of it to make the 8,000 nails needed for this same longship.

An average knörr’s sail was 90m² (smaller than the longship’s) and used the wool of 200 sheep, all of which had to be spun into thread and woven into continuous lengths of fabric, each 65cm wide.

This spinning and weaving work took experimental historians 7,850 hours to recreate (around 4.5 years for one person).

Another month was needed to sew the sail panels together, cut it to shape and reinforce its edges. Then there’s the ship’s cordage: so much horsehair, hemp and linden bast (a plant fibre) for 3,000 metres of rope.

This constant and large-scale manufacturing paints an evocative picture of the Vikings’ everyday, shipbuilding life.

It was all hands on deck, so to speak.

Lisa Bennett 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.

Thinking about autism has evolved.

Just three decades ago, autism was a relatively rare and clearly defined condition, diagnosed in people with limited verbal language and highly repetitive behaviour.

Today, autism is diagnosed along a spectrum of a wide range of abilities, from people who may require 24-hour care to those able to live independently.

Around 290,900 Australians are diagnosed with autism, a 42% increase from an estimated 205,200 in 2018.

For many people and their families, this has been an overwhelmingly positive change that has meant recognition of difference, and access to support they previously didn’t have.

But expanding the diagnostic boundaries of autism has also had unintended consequences. Are we leaving those with the most profound disability behind?

An expanding definition

Few diagnoses have broadened their diagnostic boundaries as much or as quickly as autism. In the space of a generation, autism went from a narrowly defined clinical condition to one of the most expansive categories in medicine. We now understand someone can be autistic without having an intellectual disability or significant language difficulties.

Today, autism is diagnosed based on differences in social communication and restricted or repetitive behaviours that are significant enough to affect everyday functioning.

At one end of the spectrum are people who may live independently but experience difficulties with social interaction, managing changes and sensory sensitivities.

At the other end are those with profound disability. They may have minimal spoken language, intellectual disability and require lifelong, around-the-clock support.

While there is broad international agreement about the core features of autism, the boundaries of the diagnosis continue to evolve. This means more people meet the threshold for diagnosis.

For example, there is evidence that some children in the 1990s who may have been described as “socially awkward” – but had autism specifically ruled out as a diagnosis – would now meet modern diagnostic criteria.

Autism can be a difference – and a disability

For many people, this expanded definition of autism has been positive.

In addition to better access to support, diagnosis can give some people a way of thinking about and understanding their experiences of the world – and their interactions with others – which previously may have been confusing or misunderstood.

This is part of a broader shift towards viewing autism through a neurodiversity lens. Autism is seen by many not as a clinical condition, but as a natural variation in human thinking, communication and behaviour.

However, for other autistic people what they live with is more than difference – it is a profound disability that affects their capacity to live independently.

So, what are the downsides?

There is a worry from some parents, researchers and some autistic people themselves that increased focus on autistic people with milder presentations might have inadvertently impacted how we recognise and understand the needs of those with profound disability.

Visibility

Increasingly, autism is portrayed in traditional media – and particularly social media – through milder and more relatable experiences. This risks making those with more profound disability less visible in public consciousness.

Some parents have described their experiences of caring for autistic children with profound disability and the isolation they feel within a culture that increasingly views autism in a starkly different way to their lived reality.

Over-medicalisation

Broadening diagnostic boundaries also risks medicalising what are in fact broadly typical differences among developing children, meaning more children are viewed through a clinical lens.

Medicalisation can have unintended consequences. These include reducing expectations of the child and their development, and providing them therapeutic supports that may be unnecessary, inappropriate or harmful.

Resources

Historically, access to support in schools and disability systems such as the National Disabilty Insurance Scheme (NDIS) has been closely tied to whether someone has a diagnosis. As more people meet criteria for autism, it places more pressure on finite funding and clinical capacity.

When resources are stretched, it can be harder for those with the most complex needs to access the level of support they require for day-to-day life.

The government’s recently announced reforms for the NDIS recognise and respond to some of these tensions. Focus will shift towards providing funding support based on functional need, rather than diagnosis.

Research

With broader definitions, research has moved towards focusing almost exclusively on more cognitively able autistic individuals. While around 40% of autistic children have an intellectual disability, they make up only about 6% of research participants.

This means those who may stand to benefit the most from research that can improve quality of life are, often, the least represented in it.

Finding a balance between inclusion and precision

In many ways, the expansion of autism has been a story of progress. More people feel recognised. More individuals and their families have access to supports. And there is far greater community acceptance of difference.

But progress brings new challenges. As a concept for guiding research, evidence-based clinical practice and policy, the broadened definition of autism has been stretched to the point of breaking.

In response, some clinical and research experts have advocated for a separate diagnostic category of “profound autism” in order to better highlight the needs of these individuals. Others have warned this could undermine the social advances made, and force those with milder levels of disability back to the margins.

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Read more: A new diagnosis of ‘profound autism’ is on the cards. Here’s what could change

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The challenge is to retain the gains of broader recognition while ensuring those with the most complex needs remain clearly in view. A spectrum can accommodate diversity. But it must have enough precision to guide action for those who need it the most.

Andrew Whitehouse receives funding from the National Health and Medical Research Council, the Angela Wright Bennett Foundation, The Stan Perron Charitable Foundation, the Channel 7 Telethon Trust, the Australian Government, and the Autism CRC. He was involved in the development of the National Guideline for the Assessment and Diagnosis of Autism in Australia. Andrew Whitehouse was also an originator of the Inklings Program, which is being trialled in Western Australian and South Australia.

David Trembath receives funding from the Autism CRC, the Commonwealth Government, Stan Perron Charitable Foundation, Liberator Australia, and the Channel 7 Telethon Trust. He was involved in the development of the National Guideline for the Assessment and Diagnosis of Autism in Australia.

Mirko Uljarevic is currently supported by the Distinguished Fellowship from the Future Health and Innovation Fund, Government of Western Australia and by the Stan Perron Charitable Foundation. He has received funding from the Australian Research Council, US National Institute of Mental Health, PTEN Research, and Simons Foundation.

Since at least the early 1990s, much of regional Australia has felt overlooked by the rest of the country.

Our regions have seen themselves as disadvantaged compared to other parts of the nation, ignored when new policies are being developed and unable to access services that match the quality available in the big cities.

That sense of neglect has helped drive the rise of One Nation specifically and populist politics more generally.

So, what has the 2026 federal budget delivered for the regional First Nations communities, industries and country towns that make up about a third of Australia’s population?

How will the regions fare under this budget’s headline initiatives? And what impact will new, regionally focused programs have over coming months and years?

A place to call home

Housing and tax are at the centre of this year’s budget. The government has closed off access to negative gearing on established homes (for purchases made from budget night onwards) while also changing the way capital gains are calculated and taxed.

The government’s intention is to make investing in rental property less attractive – and by reducing investor demand, lower house prices and help more first home buyers into the market.

But these changes will affect urban and regional parts of Australia differently. Prices may be less likely to fall in regional areas where there’s upward pressure due to the high cost of building, rather than speculation.

Some investors may leave regional housing markets, reducing the supply of rental housing. However, this impact is unlikely to be large given that rental returns are frequently higher in the regions than in the metropolitan centres.

The budget has set aside A$2 billion to help local governments cover the cost of the infrastructure needed to develop land for new housing. A quarter of this ($500 million) has been earmarked for the regions – recognising the depth of the housing crisis in regional Australia.

But this may still fall short of what’s needed, without a more systematic approach to ensure regions can continue to provide housing as they grow.

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Read more: Will this budget really make housing fairer for more Australians? It’s a good start

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Tax reform and a trust carve-out for farmers

Other budget measures will deliver small-scale benefits for regional Australians. The new $250 Working Australians Tax Offset will have a bigger impact in regional areas, which have a higher proportion of low-income households than Australia’s capital cities.

And many farmers will be breathing a sigh of relief, after Tuesday’s budget confirmed farming family trusts would be exempt from a new 30% minimum tax rate on discretionary trusts.

We often think of trusts as something only wealthy Australians have. But they play a vital role in many farming regions. Trusts can help farming families manage the good years and the bad, while also helping with succession and the sustainability of the farm.

But farming and environment groups have expressed disappointment about funding cuts for agriculture, fisheries and forestry, including from pest management and weed control programs.

What’s missing?

The 2026 budget is almost silent on some key concerns for regional Australia.

Immigration is important for the regions, with many crops and large infrastructure projects depending on migrants for their workforce. Regional businesses will be concerned their growth will stall unless there is greater certainty around migration targets and projects – particularly regarding low-skilled work.

Significant regional health initiatives are largely absent from this budget. The government has invested $11.4 billion with plans to extend bulk billing to more than 90% of GP visits by 2030.

But this is unlikely to help regions where there are no doctors, or so few that lengthy wait times are inevitable. Only six new GP clinics will be established – all in one New South Wales region.

Infrastructure priorities

Every budget includes funding announcements for new infrastructure projects. But relatively few initiatives have been included in the 2026 budget, and the most prominent new investments will not sit well with regional communities.

Last week’s dumping of the northern half of the Inland Rail freight project was unwelcome news for many living in regional Australia.

This sense of not being a priority to Canberra was only heightened when, just days after that Inland Rail cancellation, the federal government announced it would spend another $3.8 billion on Melbourne’s controversial Suburban Rail Loop.

Impacted, but not transformed

The 2026 budget will be remembered for addressing the overly generous tax treatment of housing and compensating lower-income households for the rising cost of living. Australia’s regions will be affected by these changes, but they will not be transformed by them.

Regional Australia needs policies and investments that boost new housing construction – more than this budget delivers – as well as better services and support to help businesses thrive. Perhaps those needs will be addressed in the next budget.

Andrew Beer receives funding from the Australian Housing and Research Institute, the Australian Research Council and the National Health and Medical Research Council. He is a board member for the South Australian Housing Trust.

Think about a word that looks like its meaning. For instance, the word bed kind of looks like a bed, with the vertical lines resembling the posts at either end. Loop looks very loopy.

Some words are more subtly evocative — like blizzard, whose zigzagging letters might evoke something chaotic.

The term for this is “iconicity” and it has typically been studied in the sounds of words. For example, the word meow resembles the sound of a cat. The word teeny sounds like something small.

My recent study explored iconicity in the visual appearance of words in English for the first time. I found that people processed words faster and more accurately when the words physically resembled their meanings.

English letters began as visual symbols

The letters we use in English (which is a Latin script inherited from the Roman alphabet) actually started out as visual symbols. They likely evolved from Egyptian hieroglyphs.

One possibility is that these Egyptian symbols were adopted by speakers of a North Semitic language, around 1800-1600 BC, into what is called the “Proto-Sinaitic” script.

This script used symbols to code for the first sound of the pictured thing. This is called the acrophony principle. For example, our letter M comes from a symbol for water, taking the first sound of the word mayim.

The letters have changed so much that these ancient origins aren’t relevant to reading English today. But there is some evidence that the shapes of letters have some relationship to the sounds they convey. For example, one study assembled letters for the sound /i/ (as in bee) and /u/ (as in boo) from 56 different languages and asked people to guess which was which. It turned out that people could do this, more often than expected by chance.

But this isn’t quite what I was interested in here. Rather than asking if the shapes of letters are related to the sounds of words, I was interested in whether those shapes are related to the meanings of words.

Bubble, hoop, wiggle

In this research, I asked participants to rate more than 3,000 words according to how much the shape of their letters resembled their meaning, using a scale of one to seven.

This is a common approach in the study of psycholinguistics. We often ask people to rate words on one dimension — for example, how concrete a word is, or how positive a word is — and then use those ratings to understand how people process word meaning.

The first thing to note is that there was agreement across participants, at least on par with ratings of other word properties in the past.

The highest-rated words included bubble, look, wiggle, hoop, puppy and bed.

It’s easy to come up with explanations for these ratings. Puppy looks like it has legs and a tail. There is something wiggly about the two G’s in the middle of wiggle.

But can we actually tell how participants made their ratings? We can get some clues by looking at the kinds of words that get higher ratings.

Round letters, spiky letters

Words with high ratings tended to refer to things you can see. This makes sense if participants were actually considering a resemblance between the word and its meaning.

Getting more specific, when a word for a round thing contained round letters (for example, O, G and C), it was rated higher. When a word for a spiky thing contained spiky letters (like W, Z and X), it was rated higher. Words for small things tended to be rated higher when they contained fewer letters.

All in all, it seems like the ratings actually did capture a resemblance between the look of a word and its meaning.

This is all well and good, but does it matter? To answer this, I used three existing databases with information on how quickly people can process individual words. These are from studies that, for example, present participants with strings of letters (for example, spoon or flarg) and have them identify them as real or invented words as quickly as possible.

In all three databases, I found that people were faster and more accurate at processing words that looked like their meanings. This was after accounting for all kinds of things like how common a word is, how many letters it contains and how easy a word’s meaning is to picture. Not only that, these words tended to be learned at an earlier age.

There is a growing appreciation that language is more than words and their meanings. It involves all kinds of things like tone of voice, gesture and gaze. We can now add one additional subtle cue: the shapes of letters.

David Sidhu receives funding from NSERC and SSHRC.

Canada has been chosen to house the Defence, Security and Resilience Bank (DSRB). Originally dubbed “the NATO bank,” the new institution will help NATO and non-NATO countries more easily direct funding toward defence and security needs.

This translates to hundreds of new jobs in finance, research and analysis in Montréal, Ottawa, Toronto or Vancouver — all potential host cities.

This comes as a boost for Prime Minister Mark Carney, a former banker who has sought to craft a bold new foreign policy for Canada.

As Carney argued in his acclaimed Davos speech, the ongoing geopolitical “rupture” requires countries to “hedge against uncertainty.”

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Read more: Mark Carney’s Davos speech marks a major departure from Canada’s usual approach to the U.S.

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Rethinking global co-operation

In Canada’s case, the primary concern is the aggressive behaviour of the Donald Trump administration south of the border.

To unwind longstanding dependence on the now-unpredictable superpower neighbour, the federal government has set out on an ambitious nation-building plan that includes both retaliatory tariffs on American goods and a rapid expansion and diversification of trade and investment.

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Read more: Coronavirus shows why Canada must reduce its dependence on the U.S.

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Carney’s emerging foreign policy doctrine extols the influence of middle powers alongside a commitment to “variable geometry” multilateralism — his term for the once controversial idea that institutions and coalitions should be shaped by the issue or mission at hand, rather than the other way around.

Could this approach also work in defence and security? Geography and history have bound Canada and the United States through countless formal and informal agreements, including a mutual commitment to come to each other’s defence in the event of an attack.

However strained relations between Canada and the U.S. have become, the partnership is not simply an either/or choice. Canada must instead carefully balance its relationships and interests.

The Carney government’s opening moves have included a sweeping expansion of military spending and security-related infrastructure, pushing investment toward levels not seen since the Cold War, alongside a landmark strategic defence and security partnership with the European Union and Canada’s first-ever Defence Industrial Strategy.

Combined, these initiatives reveal the core logic of the approach: to bolster Canada’s capacity for strategic autonomy over the long term.

In theory, changing where defence supplies come from is less complicated than helping Canadian companies find new markets.

Yet the hardest challenges still lie ahead.

Biggest obstacles

First, boosting current spending to meet NATO’s new spending target of five per cent of GDP will be impossible without a combination of cutting back non-defence expenditures, increasing taxes and borrowing more. No democracy can achieve this quickly without a declaration of a war economy.

Second, as a three-ocean country — nearly 40 per cent of Canadian territory is in the Arctic — Canada faces competing defence priorities.

The challenge for the government, therefore, is not just to spend more on defence, but to ensure new investments are aligned with the objectives set out in its policy and strategy documents.

Yet the Carney government is still working on these initiatives. The delay once again has to do with Trump.

From the new defence policy (last updated in April 2024) to the new intelligence priorities (first issued in September 2024) and — most significantly — a long-overdue national security strategy (last released in April 2004), these initiatives must set clear goals for the relevant government ministries and agencies while piloting the political interplay between the Trump White House and largely anti-Trump Canadian public opinion.

The Trump influence

This is a delicate dance in which every word matters. Before Trump, every new Canadian defence policy statement was predictable, emphasizing the same three roles — domestic; NORAD and other North American operations; and NATO and other multilateral operations.

Now the government often struggles to communicate even the prime minister’s own basic talking point — that intensifying rivalries among major powers makes Canada more vulnerable because of its deep dependency on its unreliable, unpredictable but powerful neighbour to the south.

The same goes for the new intelligence priorities statement. The 2024 version outlined 14 areas of focus, spanning Arctic security and cyber- threats to technological change and violent extremism.

With the risk of another global economic crisis rising, the updated statement should rethink this list.

The Carney government won’t entertain the idea of a “royal commission for securing Canada’s future” — which could be a comprehensive, non-partisan review of the nation’s long-term stability and adaptability in the new geopolitical context

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Read more: The prospects for Chinese leadership in an age of upheaval

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What comes next

This makes the long-awaited national security strategy even more important. Meant to guide resource allocation and capability development throughout at least Carney’s tenure as prime minister, this policy should not only fully acknowledge the scale of the security challenges confronting Canada but also assess the country’s comparative advantages and structural vulnerabilities as a middle power.

This, in turn, would require incorporating key dimensions of climate and economic security, as well as science and technology policy, into the strategic framework.

With some luck, this would mark a step forward in answering some of the most pressing questions about Canada’s future, including:

• What security issues should Ottawa prioritize in its “variable-geometry” multilateralism?
• How should the government approach the creation of a new agency to collect foreign intelligence — if it chooses to pursue one at all?
• What about a national industrial strategy to better catalyze all investments in defence and security?

If the Carney government is serious about both preparing for different scenarios and following through on its plans, clear communication will be essential.

Politicians and the public alike recognize the need to rethink the assumptions and decisions that have shaped Canadian life over the past 50 years, if not longer. The more Canadians understand why some risks are being prioritized over others, and why resources are being directed accordingly, the better equipped the country will be to handle what comes next.

Srdjan Vucetic has received funding from the Social Sciences and Humanities Research Council of Canada and the Mobilizing Insights in Defence and Security (MINDS) program of the Department of National Defence. He is also the co-author, with Hager Ben Jaffel, of the forthcoming book Beyond Five Eyes Intelligence: An International Political Sociology.

Across New Zealand and Australia, the impacts of a warming climate have been slowly changing how investors weigh up risk and returns.

Both countries have been experiencing more extreme events such as floods and bushfires, all while policy shifts and rising carbon prices increase pressure on firms to adapt.

As these risks grow more visible, investors are increasingly interested less in how well a fund has previously performed, and more in how likely it is to hold up in an uncertain future.

In recent years, each country has also introduced regimes mandating large companies and financial institutions to report how climate-related risks – from physical impacts to changing regulations – could affect their business.

These requirements are now being scaled back in New Zealand, with the government removing mandatory reporting obligations for more than half the 164 companies that have been subject to the rules.

By raising the threshold for inclusion in the regime from NZ$60 million to $1 billion in market capitalisation, only the very largest listed companies would still have to report.

Yet a newly released report from Deloitte suggests those underlying pressures justifying climate-risk disclosures have not gone away.

Investors, lenders and other stakeholders still expect clear information on how companies are managing climate risk – regardless of whether reporting is mandatory.

Furthermore, our research suggests these disclosures have been helping drive change that goes well beyond making climate-related financial risks more visible.

How investors are rebalancing risk

In our study, we examined more than 2,700 mutual funds across Australia and New Zealand, representing over US$500 billion in assets.

We found that as climate-related uncertainty increases, investors are paying closer attention to returns delivered by funds with strong “environmental, social and governance” (ESG) ratings.

This suggests these ratings are no longer being treated simply as signals of values or ethics, but as indicators that a fund may be better prepared for a changing economic and regulatory environment.

In fact, our results show the link between past performance and investor inflows is significantly stronger for funds with high ESG ratings.

We observed that a 1% increase in past performance leads to markedly larger inflows (new money from investors) for these funds than for those with weaker sustainability profiles.

Another key finding was that investors respond differently depending on the type of climate-related risks they are considering.

When concerns around climate policy and regulation increase, investors tend to shift towards more sustainable funds, suggesting they see firms adapting early to a lower-emissions economy as better positioned over the long term.

In our data, this type of “transition risk” was actually associated with increased investment flows, reflecting expectations that policy and technological change will favour more sustainable firms.

By contrast, physical risks such as extreme weather events tend to trigger a broader pullback from riskier assets.

These risks were associated with net outflows (more money being taken out than put in), as investors respond to immediate, tangible losses by reducing exposure rather than reallocating within the market.

Even during periods of heightened climate uncertainty, however, funds with stronger ESG profiles continue to attract relatively higher investor confidence.

More broadly, we found that climate uncertainty itself makes investors more reliant on past performance as a signal of managerial skill – especially for funds with strong ESG ratings.

A changing market climate

As with Australia’s reporting regime, which came into effect from the start of last year, many of New Zealand’s requirements have focused on improving transparency.

Our findings suggest these frameworks may be doing much more than that. They appear to be helping influence how capital is allocated in markets.

It remains to be seen how the government’s reforms will affect this dynamic, particularly as many companies and managed investment scheme managers exit the mandatory reporting regime.

However, as Deloitte’s report notes, stepping out of the reporting regime does not remove market expectations, because climate risk remains central to how capital is allocated.

For companies and investors alike, the implications of this trend are significant.

While the amended legislation eases specific reporting liabilities for directors to encourage transparency, firms that are better positioned for a low-carbon transition may find it easier – and potentially cheaper – to access capital. Those that lag face growing pressure.

For fund managers, this means ESG should no longer be treated as a peripheral consideration, but as a core part of how risk and performance are managed and communicated.

For investors, it’s clear this rating is serving as a useful guide to where to put their money.

What we are observing may be the early stages of a broader shift, where success depends as much on how funds are positioned for the future as on their past performance.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.