Economic Perspective 23 January 2026

The Latest Trending Economic News Curated for You by Balmoral Group Australia

Good morning readers,

This week’s edition explores policy, trade, and the developments of AI in the food industry. On the policy front, a new Lowy Institute paper examines potential avenues for a Japan-Australia green iron export partnership amid diverging energy transition strategies. Meanwhile, a commentary from the productivity commission on recent recommendations makes the case for more health funding towards preventative measures.

Beyond government, AI continues to reshape the food industry. A new technology aims to optimise the recycling of Agri-food waste to turn in into edible protein, while the other article evaluates the expanding role of AI-powered grocery shopping. These are evolving from assistants to decision-makers by planning meals or adding suggested items to shopping baskets, which raises questions about how closely personalised experiences align with consumers’ interests, how data is handled, and the trade-offs between convenience, privacy, and autonomy.

Finally, I’ve also attached a figure from that visualises Australia’s coal and gas production outlook to 2050, offering a useful snapshot of what lies ahead if demand for fossil fuels like coal continues its downward trend.

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Hope you enjoy the articles and have a great weekend!

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Reframing the Australia–Japan energy relationship 

Analysis from the Lowy Institute makes suggestions for both countries to navigate their divergent energy transition strategies. Japan currently faces energy insecurity, dependence on fossil LNG and costly hydrogen and ammonia fuel imports to progress their transition. Meanwhile, Australia has plentiful energy but requires at-scale investment and export demand. The paper’s key recommendation involves relocating Japan’s energy intensive iron-making industry to Australia, allowing Japan to reduce energy consumption by 11% (equivalent to 70% of their nuclear energy usage in predicted 2040 terms) and avoid clean fuel import costs. For Australia, such partnership would provide much needed Japanese investment and generate an additional AU$24 billion in revenue. Furthermore, low-cost Australian iron would increase the competitiveness of Japan’s steel and downstream products. Read more here.

A stronger focus on prevention could help governments rein in health care and social spending 

Angela Jackson from the Productivity Commission provides commentary on the recent inquiry into the national-level efficiency gains of preventative health measures. Health and social care make up five of the top seven fiscal pressures on the federal budget, including NDIS, hospitals, medical benefits, aged care and childcare subsidies. However, Australian spending on prevention is half as much as Canada, the UK and Finland, and even Australia’s health prevention strategy recommends increasing spending from 2 to 5% of the health budget. Such investments would target youth justice, out-of-home care, early childhood education and homelessness, areas which have positive spillovers to a range of health indicators. Read more here.

CSIRO partners on global project to boost food security 

CSIRO has partnered with the University of Leeds in a two-year project to develop a new AI tool for optimising agri-waste fermentation recycling processes. Fermentation can convert agri-food waste, specifically discarded vegetable crops and by-products of grain and cheese production, into sustainable, high-quality protein to be utilised in food production. The AI tool in development will calculate optimal fermentation conditions for waste products to produce microbial protein powder. Through optimising reuse, the project aims to attenuate the seven million annual tonnes of food waste in Australia, which represents a third of our food production. Read more here.

Do Woolworths shoppers want Google AI adding items to buy? We'll soon find out 

Major US retailers are adopting “proactive digital concierges” using Google systems, part of a broader movement to promote agent-based retail commerce. Woolworths may be following suit with their chatbot "Olive”, allowing shoppers to request personalised shopping baskets, recipe lists and meal plans from chatbots. This fundamentally changes the role of the shopper. Over time, repeated delegation shapes habits and preferences, allowing Olive to nudge shoppers towards Woolworths' commercial priorities. These behavioural nudges would be subtly imbedded in choice architectures presented to the shopper, rather than a recognisable layer like traditional advertisements. Read more here.

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Australia's coal and gas production outlook

This figure from the Lowey Institute's analysis "Reframing the Australia–Japan energy relationship" shows the change in output for coal and gas from 2025 and projected up to 2050. 

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