Federal election 2025: All the cost-of-living pitches from Labor, the Coalition

With cost-of-living a key issue days out from the federal election, here’s what the major parties are promising to help ease your budget bottom line.

With cost-of-living set to be the number one election issue facing voters, both major parties have fought to position themselves as the side most capable of handling Australia’s economy.

With households battered by surging inflation and high interest rates, Labor has branded itself as the party which delivered two back-to-back surpluses, while delivering budget relief for Australian families.

On the other hand, the Coalition, led by Peter Dutton, has taken aim at increased government spending, claiming it has prolonged inflation and subsequently heightened interest rates, with the cash rate currently sitting at 4.1 per cent following its first cut since November 2020.

When it comes to who’s doing what to help your household’s budget bottom line, here’s what both major parties are pledging.

What they agree on:

Bipartisan support for beer tax freeze: The Coalition has backed Labor’s position to freeze the alcohol excise on draught beer for two years, starting from August 1, 2025. While the much-hated tax adds about 1-2 cents per pint bought at the pub, it will aid brewers and publicans.

$8.5bn to boost bulk-billing: The Coalition will also match Labor’s $8.5bn Medicare pledge aimed at supercharging bulk-billing rates at GPs.

PBS boost: Medicines listed on the pharmaceutical benefits scheme to be capped at no more than $25 per script.

$150 energy rebate: Both parties have agreed to extend energy bill rebates for all households until the end of 2025, saving $150 per household at a cost of $1.8bn.

Both major parties have vowed to commit $8.5bn to increase bulk-billing rates across the country. Picture: NewsWire/ Martin Ollman

Labor

HECS cuts: Effective from June 1, 2025, the government will implement a 20 per cent reduction on all student loan debts, including HELP, VET Student Loans, and Australian Apprenticeship Support Loans.

It is expected to eliminate approximately $16bn in student debt, benefiting around 3 million Australians. A graduate with an average HELP debt of $27,600 will see about $5,520 wiped from their outstanding loan.

Increased HELP repayment thresholds: Starting in the 2025-26 financial year, the minimum income threshold for compulsory student loan repayments will rise from approximately $54,000 to $67,000.

Additionally, repayments will be calculated based on the portion of income above this new threshold. For example, an individual earning $70,000 will pay around $1,300 less per year in repayments under this new system.

Tax Cuts: In the 2025 federal budget, Treasurer Jim Chalmers announced two new tax cuts to the lowest bracket, with the rate to drop from 16 per cent to 15 per cent from July 1, 2026, and to 14 per cent in 2027-28. The cut, legislated one day after the budget was handed down, would be permanent and equate to a saving of about $10 a week for the average earner once both cuts have flowed through.

These cuts aim to help with cost-of-living pressures while helping to avoid bracket creep.

The Coalition has declared it would repeal the changes if elected.

Instant tax deduction: A re-elected Labor government would introduce an instant $1000 tax deduction for work-related expenses.

Medicare levy: Changes to the Medicare levy would ensure one million low earners will remain exempt from or pay a reduced rate of the tax.

Cheaper childcare, slashed HECS debts and more bulk-billing clinics have made up the cornerstone of Labor’s cost-of-living election policy. Picture: Jason Edwards / NewsWire

Cheaper Childcare: Labor has already passed legislation to guarantee all households with a combined income of up to $533,280 will receive a minimum three days of subsidised childcare. The party is also promising a $1bn fund to build more than 160 new centres in underserviced areas if elected.

Fee-Free TAFE: Labor will make fee-free TAFE courses permanent, with 100,000 places to be offered per year from 2027.

Food Security Measures: The government announced a $3.5m plan to enhance food security and supply chains, aiming to reduce the costs of 30 essential products in 21 remote communities and 10 regional forums across Australia.

Boost to urgent care clinics: A re-elected Labor government has pledged $644m to increase the number of Medicare urgent care clinics from 87 to 137. The new clinics have been slated to every state and territory.

Help to Buy: The government committed another $800m in the 2025 federal budget to lift property price and income caps on its Help to Buy scheme, which contributes equity of up to 40 per cent to support eligible homebuyers.

Home Guarantee Scheme: All first homebuyers to be eligible for 5 per cent deposits, without needing to pay mortgage insurance.

Power bills: $75 rebate for household and small business electricity bills to be extended for another six months.

Solar batteries: Labor will provide up to $4000 in savings per household on solar battery installations. This program will not be means tested.

Pay rises: Labor has earmarked $2.6 billion for a pay rise for 60,000 aged care nurses, and made a submission to the Fair Work Commission recommending a real wage increase for three-million minimum wage and award workers.

Prime Minister Anthony Albanese and Opposition leader Peter Dutton have both pledged to freeze the alcohol excise on draught beers for two years. Picture: Mark Stewart / NewsWire

The Coalition

One-off tax cut: The Coalition has pledged a one-time tax offset of up to $1200 for workers earning up to $144,000.

Mortgage tax break: The Coalition will allow first homebuyers of new properties to claim the interest paid on the first $650,000 of a mortgage as a tax deduction, which is expected to cost $1.2 billion over four years.

Fuel excise cut: The fuel excise would be cut in half for 12 months starting in July if a Coalition government is elected. This would slash about 25c per litre off petrol costs, at a cost of about $6 billion.

Superannuation for housing: A Coalition government would allow first homebuyers to take 40 per cent of their superannuation, up to $50,000, for a home deposit.

Home Guarantee Scheme: The Coalition has also vowed to maintain the Home Guarantee Scheme program, which includes a 5 per cent deposit program for first homebuyers, as well as a 2 per cent deposit scheme for single parents or eligible single legal guardians with at least one dependent.

Car emissions: The Coalition would scrap Labor’s proposed penalties on car companies that breach vehicle emission standards, which it claims would lower the price of SUVs and utes.

Peter Dutton has campaigned hard on the Coalition’s fuel excise cut. Picture: Richard Dobson / NewsWire

Gas prices: Peter Dutton has vowed a domestic gas reservation policy would cut household gas bills by 7 per cent for households and 15 per cent for industrial users.

Tax breaks for small businesses: Small businesses with an annual turnover of less than $10m will be able to access up to $20,000 in tax deductions for meal and entertainment expenses.

Increase to psychology sessions: Australians who have a mental health care plan will be able to access 20 Medicare-subsidised psychology sessions, an increase from the current 10. The appointments were doubled during the pandemic.

Food relief: The Coalition has announced $50 million for food relief charities to boost support for struggling families

Supermarket giants on notice: Mr Dutton will equip the ACCC with divestiture powers to break up supermarket duopolies if they are found to be price gouging, or using their market share to dud producers and farmers. The Coalition has also pledged to introduce a Supermarket Commissioner to enforce the Food and Grocery Code.

Insurers warned over hikes: Insurance giants have also been put on notice, with Mr Dutton threatening companies with divestiture over premium increases for households and businesses in areas prone to natural disasters.

Instant asset write offs expanded: Currently $20,000, the instant asset write off will be extended to $30,000 for small and medium businesses if the Coalition wins government. This would applies to depreciating assets with a cost of less than $30,000.

The Opposition Leader spoke at length about his housing plan in a series of appearances early in the campaign with son Harry. Picture: Richard Dobson / Newswire