Albanese will enter his second term as a Labor hero after leading his party to successive victories. Australian Broadcasting Corp. was projecting at 10:05 p.m. Sydney time that the Labor government would win at least 85 seats versus 77 in the previous term. 

“Today, the Australian people have voted for Australian values,” Albanese said after claiming victory in Sydney. “For fairness, aspiration and opportunity for all.”

Albanese ran an almost faultless campaign, turning around polls at the start of the year that had suggested he was headed for defeat. In contrast, opposition leader Peter Dutton struggled, frequently contradicting himself, backflipping on policies and even being forced into an apology for misquoting the Indonesian president.

Dutton conceded defeat after losing his seat to Labor, telling supporters in Brisbane that he had called the prime minister to congratulate him on his win.

“We did not do well enough during this campaign, that much is obvious tonight and I accept full responsibility for that,” Dutton said. 

Albanese’s center-left government had struggled during its first term with headwinds such as sticky inflation, high interest rates and a housing crunch that risked a voter backlash. The government sought to soothe those concerns with additional tax cuts and rebates in a pre-election budget.

Labor’s recovery was aided by global volatility sparked by U.S. President Donald Trump’s tariff program, which he unveiled during the first week of the campaign. In Australia, offshore uncertainty tends to draw voters back toward the incumbent and this dovetailed with a more focused performance on the hustings from Albanese. 

The prime minister campaigned on a platform of stability, while drawing comparisons between Dutton, a former Queensland policeman, and Trump, who is deeply unpopular in Australia.

“In this time of global uncertainty, Australians have chosen optimism and determination,” Albanese said in his victory speech. “Australians have chosen to face global challenges the Australian way, looking after each other while building for the future.” 

Labor’s win came days after Canada’s center-left government secured a fourth term, a result heavily influenced by expectations that new leader and ex-central banker Mark Carney would be able to manage the U.S. leader.

Dutton, in his speech, said that he told Albanese that the prime minister’s late mother, who raised him on a disability pension, would be proud of what he had accomplished.

Albanese will have to grapple with an economy at a crossroads as its key growth drivers—China, immigration and the housing sector—are all under pressure. The obvious response, economists say, is a major reform program to revive economic dynamism and raise living standards, a task successive prime ministers have shied away from because of the political risks involved.

Both sides sought to convey that they had a solution to Australia’s housing crunch. Albanese promised to pour billions of dollars into properties for first-time buyers, while also allowing them to purchase homes with deposits as low as 5%.

At the same time, Labor has an opportunity to cement its clean-energy policies and offer greater certainty to investors.

The center-left government introduced a raft of decarbonization and renewable targets during its first term and committed to spending significantly on clean energy and manufacturing. On the campaign trail, it announced a new Cheaper Home Batteries Program to subsidize behind-the-meter storage to ease cost of living pressures.

The election was a rare example of offshore events intruding in the campaign.

On April 2, five days after Albanese called the vote, Trump announced his plans for “reciprocal” tariffs including a 10% charge on Australian exports, sparking voter concern as markets worldwide plunged. 

Then in the fourth week, as Australians began early voting, Pope Francis passed away, leading both parties to briefly pause their campaigns.