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5 things you need to know about Labor’s cost-of-living policies

·3-min read
Woman holding money and PM Anthony Albanese
Cost of living has been at the centre of the 2022 Federal Election, with the cost of food, petrol and housing skyrocketing. (Source: Getty)

Soaring inflation made cost of living a focus point throughout the federal election campaign.

With a majority or minority Labor Government in train, Aussies expect to see a suite of policies aimed at easing the rising costs of housing, child care and other key expenses.

Here’s how a Labor Government is likely to impact your hip pocket.

Tax

Labor supported the Coalition's tax relief policies, which included an increase in the low and= middle income tax offset (LMITO) by $420 this year.

The LMITO was intended as the first round of three stages of tax reform, with the final stage set to eliminate an entire tax bracket so that people earning between $45,000 and $200,000 pay the same tax rate.

Under this policy, people earning between $45,000 and $200,000 will get taxed 30 cents to the dollar instead of 32.5 cents.

Super

There will be minimal changes to superannuation under Labor.

The superannuation guarantee will still be raised to 12 per cent of wages by 2025, as is currently legislated.

The party also supported new rules to lower the age of downsizers looking to make a one-off $300,000 tax-free contribution to their super when selling their home.

Housing

Housing is one area Labor’s policies differed from the Coalition’s.

The party has a plan to help more people into the housing market by contributing to a portion of the home.

Under the ‘help to buy’ scheme, the Albanese Government will become an equity partner in 10,000 homes a year.

It will chip in 40 per cent to the cost of a new home, and 30 per cent for an existing home.

To qualify, individuals will have to earn less than $90,000 a year, and couples a combined $120,000 a year.

Labor also backed the expansion of the Coalition's deposit-guarantee schemes.

Under these schemes, those eligible can get a home with a 5 per cent, or even a 2 per cent, deposit, and avoid paying lenders mortgage insurance (LMI).

A new regional housing scheme will also be rolled out for first home buyers or people who haven't owned property in the past five years.

The new Government will also 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.

Child care

Labor plans to lift the childcare subsidy cap to 90 per cent for families for the first child in care.

The party also promised to increase childcare subsidy rates for every family with one child in care, unless they earn over $530,000 in household income.

Petrol

Labor committed to reinstating the fuel excise tax in full after the Coalition temporarily lowered the tax for six months.

Come September, that means motorists will be charged 44 cents a litre rather than 22 cents a litre.

Both parties wanted to reinstate the halved tax excise in September.

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