Originally published by Editorial of The Australian
14.03.2026
During the most recent global economic shocks Australia has been well-placed to protect itself. When the global financial crisis hit in 2008, there was no net government debt and our ability to respond was high. It was a similar story a decade later when the Covid pandemic effectively shut the world economy overnight. With the world now facing the very real prospect of another economic shock from the war in Iran, our financial position and outlook could not be more different.
National debt is near $1 trillion, government spending continues to grow almost unchecked and productivity growth is flatlining. Interest rates are rising because the domestic inflation dragon has not been slain and the challenge is likely to get more difficult because of world events. There is a self-inflicted energy crisis in electricity and domestic gas supply that is starting to get real for transport fuels as well.
There is also a growing threat that the foundations of Australia’s economic success story are being relentlessly undermined. High energy prices together with increased government interference are making it harder to invest and do business. Stricter workplace regulations and an increasingly demanding trade union movement threaten to make things even worse.
As the full impact of the first two rounds of the Albanese government’s industrial relations changes starts to bite, trade unions are setting out their new horizon of demands for workers to be paid more for doing less – the definition of reduced productivity. The response of ACTU secretary Sally McManus to the government that more leave and a shorter working week are not currently on the agenda is “part of what we will do is put it on the public agenda”.
The debilitating fruits of the ACTU’s long-term strategy are starting to show in the Pilbara iron ore mines that have been the engine room of national prosperity. Like the waterfront, the Pilbara is totemic in the history of Australia’s industrial relations story. Breaking the union stranglehold was hard-won in the Pilbara during the 1980s but it delivered high wages for workers, a flexible workplace for business and rivers of royalties cash for government.
Just as the outlook for the iron ore industry is becoming less certain, union demands to re-unionise the Pilbara workforce are getting louder. BHP has been flooded with requests from trade unions for access to the worksite under new laws introduced by the Albanese government. They hit 844 in 2025 and are 168 so far in 2026. The Pilbara region now faces its first strike at a major miner since the Fair Work Act was introduced in 2009. The Electrical Trades Union is gloating about a possible return of workplace disruption. The Pilbara experience is being repeated at other major mine sites producing base metals and coal in other states.
The big picture is one of higher costs, less certainty and greater sovereign risk for business as many are starting to move their investments offshore. BHP now makes more money from its copper mines in Chile than it does from iron ore in Australia.
Meanwhile, many in the hi-tech sector who have championed a transition to a post-mining, pro-climate action-driven world are dealing with problems of their own. The share price of software company Atlassian, which is led by Mike Cannon-Brookes, is down 80 per cent and staff numbers are being cut. It is a sector-wide trend as artificial intelligence disrupts the disrupters who have delivered astronomical valuations but most often little or no profits.
The war in Iran brings with it a reality check. Government must lean into resilience and prudence, and plan for an uncertain future. It is time for thrift, not waste, and to put national self-sufficiency ahead of ideologically inspired self-harm.
