Yahoo Finance Federal election: How each party plans to slash your living costs
The cost of living has been top of voters' minds in the lead- up to the election, with Aussies feeling the pinch from soaring costs of petrol, food, housing, and just about everything else.
The consumer price index (CPI) rose 2.1 per cent in the March 2022 quarter and 5.1 per cent annually, confirming what Australians already suspected about rising costs.
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The spike in inflation prompted the Reserve Bank of Australia to start hiking interest rates, putting additional pressure on mortgage holders.
Rentals are also soaring, and sluggish wage growth suggests people aren’t getting the pay rises they need to meet these rising costs, although one silver lining is low rates of unemployment.
With one more sleep before heading to the polls, here’s what we know about how the two major parties plan to ease the hip-pocket pain people are feeling.
Liberal plan to ease cost-of-living pressures
Child care
Childcare costs are top-of-mind for many parents, with the average family forking out around $105 for each 10-hour day.
In the lead-up to the 2022 Budget, the Coalition announced it would boost the childcare subsidy for second and subsequent children by 30 per cent.
The Government has also removed the annual subsidy cap of $10,655 for families earning more than $190,015 so that no family has an annual cap on their subsidies.
Health
The Coalition has committed to lowering the PBS Medicines General Co-payment by $10 per script.
It has also committed to a host of other healthcare-related policies, including expanding mental-health care.
This means the maximum price Australians will pay for PBS medicines drops from $42.50 down to $32.50 per script, representing a 24 per cent saving.
Housing
Housing has been another big issue, with rents soaring and house prices rocketing out of reach for many first-time buyers.
The Coalition dominated the narrative in the final week of the election by announcing a plan to let first home buyers access their super to buy a house.
Under the Super Home Buyer Scheme, first home buyers would be able to invest up to 40 per cent of their superannuation, up to a maximum of $50,000, to help with the purchase of their first home.
In the 2022 Budget, the Government also committed to expanding its first home buyers and family home guarantee schemes.
Under the changes, 35,000 first-home buyers would be able to buy a property with only a 5 per cent deposit - up from 10,000 last year - with the other 15 per cent of the loan guaranteed by the Government.
It also introduced a similar scheme just for regional first home buyers or people who hadn’t owned a property for a while, open to 10,000 recipients a year.
There will also be 5,000 home guarantees for single parents each year.
People eligible for these schemes could get a home with a 5 per cent, or even 2 per cent, deposit and avoid paying lenders mortgage insurance.
The party also expanded voluntary contributions to save for a home deposit under the First Home Super Saver Scheme from $30,000 to $50,000.
This enables first home buyers to save more quickly and build a larger deposit, with concessional tax rates.
Taxes
The Government announced an expansion of the low and middle income tax offset (LMITO) for individuals in the 2022 Budget.
This means that those earning less than $126,000 a year are eligible for a tax offset of up to $1,500.
Labor plan to ease cost-of-living pressures
Child care
Labor has gone big on child care, with plans to lift the childcare subsidy cap to 90 per cent for families for the first child in care.
The Opposition has also promised to increase childcare subsidy rates for every family with one child in care, unless they earn over $530,000 in household income.
Under a Labor government, a household earning less than $75,000 a year, say, would get their child care subsidised by 90 per cent, and a household with an income of $175,000 would get a 71 per cent subsidy.
The increased subsidy would also be extended to outside-school-hours care.
Health
Labor has committed to lowering the PBS Medicines General Co-payment by $12.50 per script.
That means the maximum someone will pay for medicine under the PBS would drop from $42.50 per script, to a maximum of $30 per script.
Labor has a host of other healthcare-related policies, including setting up 50 Medicare Urgent Care Clinics that are designed to take pressure off emergency departments, and will bulk bill.
Housing
Labor also has a new idea to help more people get into the red-hot housing market by chipping in for a portion of the home.
Under the ‘help to buy’ scheme, a Labor government would become an equity partner in 10,000 homes a year.
It would contribute 40 per cent to the cost of a new home, and 30 per cent for an existing home.
To qualify, individuals would have to earn less than $90,000 a year, and couples a combined $120,000 a year.
There would also be a cap on the property’s value based on location.
Labor has also backed the expansion of the Coalition's array of deposit-guarantee schemes.
It has, however, opposed the Government’s scheme for allowing first-home buyers to access their super to buy a home.
The Opposition also wants to boost the supply of social and affordable housing by creating a $10 billion Housing Australia Future Fund.
The returns from the investment would be used to create 30,000 new social and affordable homes in five years.
To pay for its housing-affordability policies, Labor plans to double foreign investment screening fees and financial penalties.
Taxes
Labor has backed the final stage of the tax cuts, which will mean all Aussies earning between $40,000 and $200,000 a year will face the same marginal tax rate of 30 per cent.
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