Australians’ economic optimism falls to lowest levels in two decades: Lowy Institute
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The news: The Lowy Institute’s 2025 poll found that Australian citizens’ feeling of safety and optimism have fallen to the lowest levels in the 21-year history of the thinktank’s poll, as global conflict and economic uncertainty drag on sentiment.
The numbers: 51% of Australians feel either “safe” or “very safe” when considering the state of the world, while just 52% of Australians feel any level of optimism about the country’s economic performance over the next five years.
The context: Lowy Institute executive director, Dr Michael Fullilove, explained that Australians’ pessimism reflects a precarious time for the world. “Australians are clearly unsettled by what they’ve seen of the second Trump administration, with almost two-thirds (64%) now holding little to no trust in the United States to act responsibly — the lowest level in the history of the Lowy Institute Poll.”
“At the same time, the public continues to separate the person of the president from the institution of the alliance. Most Australians (80%) still believe the Australia–US alliance is important to our security — one of the most consistent findings in the history of the Institute’s polling.”
Australians remain wary of China, with just 20% saying they feel some level of trust toward the country. Australians are almost evenly split on whether China is more an economic partner (50%) or security threat (47%). However, a majority (69%) continue to think it likely that China will become a military threat to Australia in the next 20 years.
Author of the poll and director of the Institute’s Public Opinion and Foreign Policy Program, Ryan Neelam, said many Australians remain wary of China after the Chinese Navy’s circumnavigation of Australia earlier this year.
“Yet looking to the future, those who believe China (56%) will be the most powerful country in the world in ten years more than doubles those who say the same of America (27%),” Mr Neelam said. “Half the population (51%) say Australia should increase defence spending, although far fewer younger Australians are supportive of doing so.”
The poll found that support for buying nuclear-powered submarines under AUKUS remains strong, with 67% favouring the deal. But the submarines are notably more popular among those who lean towards the Coalition compared to Labor-voters.
On economy and trade, only half of Australians (52%) said they feel any level of optimism about Australia’s economic performance over the next five years, equalling a Covid-era low in 2020. This reading was taken in March, after Donald Trump had imposed or threatened tariffs on several countries, but prior to his sweeping 2 April ‘Liberation Day’ tariffs. 83% of Australians think the country should make more goods in Australia, even if they cost more. Only 16% of the population say Australia should source all goods from wherever they cost less.
The thinktank’s flagship survey was conducted between 3 March and 16 March this year, and comprised the responses of 2,117 Australian residents aged 18 and above. It is the longest-running and broadest survey of Australian public opinion.
The source: Lowy Institute 2025 Poll
