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Federal election: What each party plans to do about the rising cost of living

·Personal Finance Editor
·3-min read
Anthony Albanese and Scott Morrison shaking hands in the first leaders debate in which they discussed the rising cost of living.
Whoever wins the upcoming federal election will need to address the rising cost of living. (Source: Getty)

Yesterday’s inflation data laid plain exactly what many Australians around the country already knew - the cost of living has shot up.

This has led many experts to predict the Reserve Bank of Australia (RBA) will be forced to increase interest rates at next week’s board meeting.

But the major jump in inflation has also come smack bang in the middle of an election campaign, where the two major parties have a chance to tell us what they plan to do to ease the pressure.

This is what we know about how the Liberal and Labor parties plan to ease our red-hot economy.

Liberal plan to ease cost-of-living pressures

Child care

Childcare costs are a major factor for families and have been an ongoing issue for many.

The Coalition brought forward its childcare-subsidy plan from July to March this year.

The subsidy means families with two or more children in care under six years old are eligible to receive an additional 30 per cent on top of the current subsidy, with the total capped at 95 per cent.

For families with only one child in care, the subsidy has remained the same, with a maximum cap of 85 per cent.

Housing

In the 2022 Budget, the Government announced plans to expand its first home buyers and family home guarantee schemes.

This means those eligible could get a home with a 5 per cent, or even 2 per cent, deposit and avoid paying lenders mortgage insurance (LMI).

It has also announced a new regional housing scheme for first home buyers or people who haven't owned property in the past five years.

Taxes

The Government announced an expansion of the low and middle income tax offset (LMITO) for individuals.

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 further than the Coalition in promising subsidies for families.

These include raising the subsidy cap to 90 per cent for the first child in care with a long-term goal to provide that same cap to all families across the board.

Labor also plans to lift the household income threshold to $530,000 a year with no annual cap.

Housing

Labor has committed to create a $10 billion Housing Australia Future Fund with returns from the investment being used to create 30,000 new social and affordable homes.

Labor promised to create a regional scheme with 10,000 places a year, prior to the Coalition announcing their scheme.

Taxes

Labor said last year it would support the final stage of the tax cuts, so regardless of who wins, the same cuts will still take place.

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