Albanese and Dutton rack up $25bn in promises with first home buyers, family budgets the big winners

Anthony Albanese and Peter Dutton have racked up almost $25bn in promises across a weekend-long spend-a-thon - with two clear winners emerging. Find out what you get.

First home buyers and family budgets are the big winners from Anthony Albanese and Peter Dutton’s weekend-long spend-a-thon, with the leaders racking up almost $25 billion in election promises between them.

The Prime Minister and Opposition leader held their official campaign launches on opposite sides of the country on Sunday – Mr Albanese in Perth and Mr Dutton in Western Sydney – unveiling massive tax concessions and supports to help young Australians buy their first home.

The building sector has welcomed the renewed focus on housing, but economists have warned both sides are risking driving up property prices higher by ramping up demand without properly addressing supply constraints.

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Anthony Albanese launches Labor’s campaign in Perth. Picture: Jason Edwards

Mr Albanese’s decision to launch his campaign in Western Australia, as he did in 2022, signalled how important the state is for Labor if it hopes to form majority government.

The sleek event at Perth Convention and Exhibition Centre included 500 of the party faithful, with senior Labor ministers lined up in the front row and former prime minister Julia Gillard in the middle as the special guest.

His fiancé Jodie Haydon and son Nathan also attended the series of speeches, which sought to reinforce Labor’s campaign themes — from its promise of “Building Australia’s Future” to Mr Albanese whipping out his Medicare card in a bid to invoke Australian national pride.

“This card is green and gold for a reason. Medicare is a declaration of Australian values,” he said.

Mr Albanese announced under Labor taxpayers would be able to automatically deduct $1000 of work expenses on their tax return without needing receipts, delivering an average saving of about $205 a year to up to six million people.

He also promoted Labor’s changes to the First Home Guarantee scheme to allow an estimated 80,000 Australians to buy their first house with just a five per cent deposit, and a new $10bn fund to build 100,000 new homes reserved just first-time buyers.

Mr Dutton’s campaign launch the Liverpool Catholic Club was a tight-knit family affair, with his wife Kirrily, sons Harry and Tom and daughter Rebecca front row of the 250-strong crowd made up of senior Coalition MPs, Liberal party officials, staffers and volunteers.

Former prime ministers John Howard, Tony Abbott and Scott Morrison also attended the event where Mr Dutton pledged to “get Australia back on track”.

He spruiked the Liberals’ $10bn pledge to deliver a one-off instant tax offset of up to $1,200 for Australians earning $140,000 or less.

Mr Dutton’s centrepiece announcement was a $1.25bn plan to allow first home buyers purchasing a newly built home to tax deduct payments on up to $650,000 of their mortgage for the first five years they live in the home, which would be means-tested to individuals on up to $175,000 and $250,000 for couples.

“I will be a Prime Minister who restores the dream of home ownership,” he told the cheering crowd.

For example, a first home buyer earning $120,000 with a $650,000 mortgage at 6.1 per cent interest would receive a benefit of about $12,000 annually for five years.

Under the plan, Australians could borrow more than $650,000, but the deductions would only apply to repayments relevant to that amount of the mortgage.

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Peter Dutton launches the Coalition’s campaign in western Sydney. Picture: Richard Dobson

The Property Council of Australia chief executive Mike Zorbas said Labor’s plan was a “generational investment” that balanced supply and demand, while the Coalition’s overall policy offerings — including its $5bn housing infrastructure program – would boost national supply

Master Builders Australia chief executive Denita Wawn said the “key missing piece” from Labor’s policy was the need for more tradespeople.

On the Coalition’s policy, Ms Wawn said support for first home buyers needed to be paired with reforms to cut construction costs, which were going up due to a lack of productivity and planning bottlenecks.

But Economist Chris Richardson warned with “both sides throwing money around,” inflation would be kept higher than it would have been otherwise.

He said this meant the “losers” from the policy announcements were wage earners, borrowers and taxpayers because inflation meant higher prices, interest rates and more income tax bracket creep.

Mr Richardson said making it easier for first homebuyers to buy was the “go-to” policy of politicians who were “avoiding doing the hard yards”.

“Australian housing suffers from too much money chasing too few homes, so adding to the extra money going in results in ever higher prices,” he said.

Independent economist Saul Eslake said Labor and the Coalition had seemingly reached a “bipartisan consensus to push up house prices further”.

He said to even the housing playing field incentives for first home buyers should instead be scrapped, as should negative gearing, while the capital gains tax discount should be reduced.

“When you’re in a hole the first thing you’ve got to do is stop digging — and we’re in a hole with regard to housing because governments keep doing things that push house prices up,” Mr Eslake said.

Originally published as Albanese and Dutton rack up $25bn in promises with first home buyers, family budgets the big winners