Where Albanese and Dutton stand on the eight key issues in this election

Anthony Albanese and Peter Dutton have launched their formal election campaigns with duelling policies on taxation and housing, which will add to the policy debate at this year’s election.

The leaders are also tussling over Medicare and fighting over the best energy policy for Australia’s future. But it all comes down to the cost of living, which is the defining issue of the campaign, as turbulent global affairs put a spotlight on foreign policy and the economy.

Here are the key policy issues dominating the campaign, and where Labor and the Coalition stand on them.

Housing and home ownership

For first home buyers, Labor is promising $10 billion to build 100,000 homes exclusively for first-time buyers to move into from 2027. It will also allow all first home buyers to purchase property with just a 5 per cent deposit, with the government to guarantee the rest of a typical 20 per cent deposit.

This is on top of its promise to build 1.2 million homes by the end of the decade. Its $10 billion Housing Australia Future Fund will raise money for new builds, including 40,000 social and affordable rental homes.

The Coalition, on the other hand, will allow first-home buyers to deduct mortgage interest payments from their taxable income for five years when they buy newly built homes, up to the first $650,000 of a mortgage. This will apply to singles earning up to $175,000, and couples on a combined income of up to $250,000.

Australians would also be able to withdraw up to $50,000 from their superannuation accounts to buy their first home. The Coalition says it will abolish Labor’s housing fund and instead invest $5 billion to deliver infrastructure – such as water, power and sewerage – at development sites, which it says will help build 500,000 new homes.

Both parties will ban foreign investors from buying existing homes for two years – a Coalition policy that Labor has adopted.

Taxes and cost-of-living relief

Tax was a latecomer to the campaign agenda but has become a significant talking point.

Labor will create a $1000 instant tax deduction for work-related expenses, so people won’t need to submit receipts up to that amount in their tax returns.

The party has also introduced an extra tax cut – on top of its restructured stage three tax cuts – that will reduce the lowest marginal tax rate from 16 to 14 per cent over two years, starting in July 2026. It means workers will get a $268 tax cut in 2026-27, which becomes $536 a year from 2027-28 onwards.

The Coalition says it will repeal the latest tax cut if it wins government, effectively reinstating the higher 16 per cent tax rate.

But it will give a one-off $1200 tax offset to people earning between $48,000 and $104,000 in next year’s tax return. Taxpayers earning below $48,000, or between $104,000 and $144,000, will receive a smaller amount.

The Coalition will also halve the fuel excise for 12 months, saving Australians 25.4¢ per litre of petrol.

Labor has extended its $150 energy bill rebate for households and businesses until the end of the year, which the Coalition has supported. However, it voted against the government’s previous two rounds of power bill rebates.

Healthcare

Health has become a key election battleground. Labor will spend $8.5 billion encouraging GPs to bulk-bill all their adult patients, reduce the maximum medicine co-payment from $31.60 to $25, and spend $573 million on a women’s package improving access to reproductive health and menopause services.

The Coalition says it will match those pledges. Labor will open another 50 urgent care clinics across the country, the Coalition will open another four.

While the Coalition is promising $500 million to lift the number of psychology sessions each person can access under Medicare, and $400 million for a youth package, Labor will spend $1 billion on clinics where people can get free psychologist or psychiatrist visits.

Energy and climate change: nuclear versus renewable

The Albanese government wants 82 per cent of Australia’s electricity to come from renewable sources – solar, wind, hydro – by 2030.

The Coalition will scale this back and instead says it will build seven government-owned nuclear power plants by the mid-2040s. Until then, it will rely on running coal plants for longer and ramp up domestic gas production. It wants gas companies to divert more supply to the Australian market, rather than ship it offshore.

Both parties have committed to net zero greenhouse gas emissions by 2050, but Labor has also set a legally binding target to cut emissions by 43 per cent by 2030. The Coalition has indicated it would be less ambitious for the end of the decade, but said it would set interim targets in government.

Population and immigration

Both parties say immigration has been too high since the pandemic and needs to come down. Labor has forecast net overseas migration will slow to 260,000 in 2025-26. The Coalition has committed to slashing the budget numbers by an extra 100,000 people.

International students are a big part of this picture: Labor wanted to cap student numbers at 270,000, but the Coalition blocked that bill. The opposition has since said it will introduce its own caps to set numbers at 240,000, while hiking student visa fees.

The parties last year formed a unity ticket when it comes to how they manage people Australia doesn’t want in the country: they teamed up on three new laws, including paying third countries to take non-citizens. However, Dutton has also pledged to go harder on this issue – he is considering a referendum on allowing politicians to strip criminal dual nationals of their Australian citizenship, and wants questions on antisemitism in the citizenship test.

Public service and workplace rights

The Coalition wants to cut 41,000 of 213,000 jobs from the federal public service to eventually save about $7 billion each year.

The Coalition’s latest message is that cuts will come from a hiring freeze, natural attrition and voluntary redundancies. The party hasn’t specified which jobs will be targeted, but frontbenchers have name-checked the federal health, education and veterans’ affairs departments, while guaranteeing no cuts to frontline roles or national security.

The Coalition has also dumped its unpopular policy requiring public servants to work from the office full-time.

Labor has defended public servants’ right to work from home and justifies the extra jobs as having improved government services, with about a quarter of them being former consultants hired permanently.

Labor’s industrial relations changes this term have included the right to disconnect, pathway to permanency for casual workers, and “same job, same pay” laws that entitle labour hire workers to the same payment as permanent staff if they do the same work.

The Coalition has said it will abolish the first two policies but keep in place the third. Its policy for tax-deductible business lunches will allow small businesses to claim up to $20,000 off their taxable income for meal expenses. It will also raise the instant asset write-off for small businesses from $20,000 to $30,000.

Social issues: the NDIS, aged care and education

Labor and the Coalition have taken a bipartisan approach to reforming the National Disability Insurance Scheme and aged care services. However, the Coalition recently indicated it wants the growth in NDIS spending curtailed further.

There are points of difference on education. Labor will abolish the activity test (which says parents must work or study to get subsidies) for childcare and give all families earning under $533,280 access to three days of subsidised childcare. The Coalition wants the activity test to stay.

The parties are also split on higher education. Labor says it will fund 100,000 fee-free TAFE spots each year, which the Coalition does not support. Labor will also wipe 20 per cent off student loans for all students and graduates, which the Coalition has rejected.

Foreign affairs and defence

Both parties support a two-state solution for Israel and Palestine. But where Labor has voted in favour of Palestinians at the United Nations several times, the Coalition will restore Australia’s pro-Israel voting record. The Coalition will also cut funding UNRWA, the UN agency for Palestinian refugees.

Both parties support Ukraine in the war with Russia, although Labor has expressed openness to sending peacekeepers to the region while the Coalition has not.

Labor will campaign on its success in restoring trading ties with China after relations soured under the Morrison government. The Coalition has vowed to have a productive relationship with Beijing while more forcefully calling out its efforts to expand its influence in the region.

Both say they will defend Australia’s interests in their relationship with US President Donald Trump.

Labor will increase defence spending from 2 per cent of gross domestic product to 2.3 per cent by the early 2030s. The Coalition says it will go further, potentially to 2.5 per cent. Both parties support the AUKUS nuclear submarine agreement.

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.