Anthony Albanese’s government facing uphill battle as it promises big

Before sweeping to power, Anthony Albanese made big promises on everything from childcare to wages, but now the hard part begins.

Anthony Albanese may have endured a bruising election campaign to emerge as a clear winner over Scott Morrison, but the road may be about to get even bumpier.

His party swept to power with a clear mandate for change. They offered big promises on childcare, housing, climate change and wages that hit the right notes with Australians — many of whom are doing it pretty tough now with the spiralling cost of living.

While all of the policies outlined in the campaign are crowd-pleasers, there are also many challenges the Labor Party has to overcome to put them in place.

The main concern is the ominous economic headwinds that are forming.

Only a couple of days after the new government was sworn, it was clear that there was to be no easy ride through the next three years despite the feel-good factor of a new government stepping in.

Treasurer Jim Chalmers held a press conference on Wednesday to tell Australians of the “dire” budget situation Labor has inherited with a deficit that could blow out further due to soaring inflation.

Australia's Prime Minister Anthony Albanese has made big promises to Australians. Picture: Issei Kato / POOL / AFP

On Thursday, there was more bad news for Australians struggling to make ends meet as the national regulator announced rises of up to 18 per cent on power bills, coming into effect from July.

Then of course there is the macro economic hangovers of the conflict in Ukraine and Covid that will loom large over the coming years.

One big positive for Labor however, is the uncertainty and deal-making of a hung parliament that has been avoided by Mr Albanese’s crushing win.

He has spoken this week of his positive view for the future of the nation, and he clearly believes he can make good on his promises.

Let’s take a look at some of the big pledges Labor have made, and whether they can be achieved in three years.

Childcare

Childcare became a big focal point for Labor during the campaign and was the biggest single spending measure it promised.

Mr Albanese said the $5.4 billion pledge to increase subsidies for 96 per cent of families means reduced costs for working families looking to get ahead.

He argues this will not only make life easier for families but boost productivity in the economy.

Professor Ben Phillips, an expert in welfare and cost of living at the Australian National University, said the measures are not difficult for Labor to put in place.

“It’s a very straight forward change that basically requires them to lift the generosity in the current scheme,” he told news.com.au.

“The only problem is a deficit in the budget, so there’s going to be questions about how much the increased cost adds to the deficit in the future.”

He said that if the deficit blows out and Australians feel the pinch because of increased interest rates and inflation, Labor will have to justify spending so much on childcare.

“That doesn’t mean it can’t happen, but it’s just something they will be wary of” he said. “And lower childcare costs is a substantial change that can help lower inflation in the long run.”

Cost of living and wages

Another hot topic in the election was the rising cost of living.

Labor ran on a platform of tackling the cost of living “crisis” that they said had spiralled on Scott Morrison’s watch.

However, Prof Phillips said there’s not actually an awful lot Labor can do to bring the costs of everyday goods down.

Australia's new treasurer Jim Chalmers. Picture: AFP

Despite surging petrol prices, the party will not extend the temporary cut to the fuel excise beyond its September end date — and there is only so much it can do when it comes to reducing the costs of groceries.

Labor admitted this during the campaign saying it plans instead to rise wages, drive productivity growth and expand the capacity of the economy.

Prof Phillips suggested a smart move to help struggling Aussies and balance the books would be to scrap Stage Three tax cuts, which will cost $15 billion a year and benefit high-earning Australians.

“These cuts blow everything else out of the water in terms of costs, so that’s where the biggest problem is going to come from,” he said,

“They could instead give more assistance to low income areas like Jobseeker recipients – that’s where relief should be targeted because middle and higher income earners are doing OK.”

Wages were a key issue throughout the election campaign, with Mr Albanese saying he “absolutely” supported a pay rise of 5.1 per cent for those on the minimum wage.

Labor has promised to back a pay rise for those on minimum wage.

Treasurer Mr Chalmers has also clarified this week that the new Labor government will formally advocate for workers on the minimum wage to get a pay rise.

The Fair Work Commission, which reviews and sets minimum wages each year, will accept submissions until June 7.

Housing

Another area Labor was keen to address in the campaign was housing and in particular helping young people into their first homes.

The government will make it easier for 10,000 Australians per year to buy a home by taking an equity stake of up to 40 per cent in their property.

The scheme, called Help to Buy, is designed to help Australians buy a home with a smaller deposit, a smaller mortgage and smaller mortgage repayments.

The government would contribute up to 40 per cent of the price and subsequently own that portion of the property. The owner would then be able to buy out the government’s stake.

It’s a big idea from Labor that has seen success in other parts of the world, and it says it won’t take long to put in place either.

The cost of housing was a major issue in the election.

Those looking to buy a home with the share going to the government will only have to wait until July before they can apply to be one of the first 10,000 participants in the scheme.

Climate change

Another key promise from Labor is to tackle climate change. It committed to cut emissions by 43 per cent within the next decade and reach net zero by 2050.

Professor Frank Jotzo, a climate change policy expert at the Australian National University, believes this promise is an easy one to get the ball rolling on that the government could actually set itself a higher target.

However, he believes economic and cost of living pressures will take up a lot of the government’s attention.

“In order to make further progress on climate change, climate change policy needs to be understood as something that benefits the overall economic agenda and effect that benefits the social justice agenda that is so important for Labor,” he told news.com.au “It can do that because you know, designed right, for example, renewable energy support policies will result in lower electricity prices rather than higher electricity prices.”

Labor believes adding more renewables to the power grid will bring prices down.

Health and aged care

Labor has also promised big on health and aged care reforms, and some of them should come into place.

It has vowed to deliver 50 new Medicare Urgent Care Clinics next financial year to take pressure off emergency departments.

It will also establish a Strengthening Medicare Fund, putting in $250 million a year over four years, to deliver improved access to GPs (including after-hours), provide greater patient affordability, put less pressure on hospitals and offer better management of complex and chronic conditions.

– with Charis Chang