Labor vs Liberal: economic plans compared
As Australians head to the polls, we examine the key economic policies of the two major parties shaping this election.
In brief
- Cost-of-living issues dominate the 2025 Australian federal election, with both Labor and the Coalition offering overlapping policies on energy rebates and medicine prices.
- Diverging approaches emerge on tax relief, housing, student loan debt and migration.
- Productivity and long-term reforms take a back seat, with limited focus on structural improvements, despite calls for measures like a permanent instant asset write-off.
Words by CA ANZ chief economist Richard Holden
If this election campaign is about one thing – and it is – it’s cost-of-living pressures. So, it’s not surprising that both major parties are focusing most of their policy offerings on cost-of-living issues. Those come in many categories.
Power, medicine and tax cuts
Labor is extending its energy rebates, though reduced to A$150 in two instalments. The Coalition is matching this. Both sides are pledging to reduce Pharmaceutical Benefits Scheme (PBS) listed medicines from A$31.60 to A$25. Labor is going ahead with the small tax cut it announced in the recent budget, while the Coalition is reintroducing (for one year) the Cost of Living Tax Offset, which provides a A$1200 offset for those earning less than A$144,000.
The Coalition is also pledging to halve the fuel excise for one year. Last year Labor announced it will cut 20% of all outstanding student loan debts. This is expensive, as much as A$16 billion. It’s also inequitable. If you’ve paid off your debt you get nothing and future students also get nothing.
On energy, the Coalition has proposed a domestic gas reservation scheme, which it claims will reduce the wholesale price from A$14 to A$10.
Housing, child care and health
Related to cost of living are the housing policies of the two sides. Labor is promising A$10 billion to build 100,000 homes exclusively for first home buyers. They’re also offering what amounts to subsidised mortgage insurance, allowing first home buyers to put down a 5% deposit. Both sides are also banning foreign investors and temporary residents from purchasing existing homes for two years.
More radically, the Coalition will allow first home buyers to deduct mortgage interest paid on up to A$650,000 of their mortgage. The scheme applies only to new construction and has a sunset provision of five years. It would also allow first home buyers to access A$50,000 from their superannuation, which must be repaid if the property is sold.
Labor is offering A$1 billion to build up to 160 new childcare centres.
Labor proposes to increase foreign students’ visa fees by 25%, to A$2000. The Coalition is proposing fairly significant cuts to migration for two years. It also proposes capping the number of international students and raising visa processing fees substantially.
On health, Labor is offering A$8.5 billion to increase bulk billing incentives and increase the proportion of doctor visits that are bulk billed. The Coalition is matching this pledge. Both are also offering A$573.3 million for women’s health.
Business, employment and nation building
Disappointingly, there is relatively little from either party on boosting productivity. One thing that would help is making the instant asset write-off permanent. This would encourage business investment, which would boost productivity. Labor has merely proposed a one-year extension. The Coalition has promised to increase it to A$30,000 and make it permanent. This was one of CA ANZ’s key policy proposals in the lead-up to the election.
Labor is proposing to ban non-compete clauses for certain classes of employees. The Coalition has pledged to unwind much of Labor’s already legislated industrial relations agenda, including its ‘right to disconnect’ laws. This would likely be productivity boosting if passed in the senate.
Both sides are promising more money (A$3 billion over a decade) for high-speed broadband.
Finally, the Coalition is seeking to bolster its economic management credentials by promising to establish two nation-building funds within the Future Fund (money invested for generations to come) and paid for from any positive variations in the federal budget. Due to Treasury making conservative estimates, these are often A$20 billion a year – and recently were dramatically more.
Ready to work with the new government
Some of CA ANZ’s other proposals, in addition to the instant asset write-off already mentioned, could well still be announced or legislated after the election, even if they don’t form a major part of the campaign.
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Enable all Australians to access financial advice by allowing qualified accountants to provide it.
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Give small business crucial cash flow certainty by making the instant asset write-off permanent.
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Scrap the annual super cap to build superannuation and improve women’s financial security.
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Make it easier to crack down on money laundering with free Australian Securities & Investments Commission (ASIC) checks.
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Address the skills shortage and reduce education costs to boost productivity.
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Stay the course on climate disclosures for regulatory and investor certainty.
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Don’t let Australia fall behind the rest of the world on digital reporting.
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