SYDNEY (Reuters)

Australia’s Labor government, elected for a second term last month, is focused on improving productivity, addressing the budget deficit, and building a resilient economy as global volatility spikes. Treasurer Jim Chalmers will discuss these priorities on Wednesday.

In a speech at the National Press Club, Chalmers will highlight that tackling sagging productivity is the government’s primary focus following a landslide victory last month.

> “Our budget is stronger, but not yet sustainable enough. Our economy is growing, but not productive enough. It’s resilient, but not resilient enough – in the face of all this global economic volatility,” he is expected to say, according to excerpts of the speech seen by Reuters.

> “The best defence against global volatility and the best way to lift living standards is with a more productive economy, a stronger budget, and more resilience.”

Australia’s economy barely grew in the first quarter as consumers tightened their spending and government expenditure, which was a significant economic driver last year, slowed down. Additionally, U.S. tariffs have negatively affected the outlook for small and open economies like Australia’s.

The ongoing conflict between Israel and Iran has raised concerns over a broader conflict in the Middle East, impacting oil prices sharply.

The Reserve Bank of Australia has already cut interest rates twice since February, with investors anticipating three further cuts by the end of the year, lowering rates from 3.85% to 3.1%.

Signs indicate that foreign investors have begun turning towards Australia’s domestically focused stocks, opting for this often-overlooked market as a safe haven amid trade tensions.