Federal election 101:

Q: What realistically needs to be done to ease Australia’s cost-of-living challenges? How are the major parties tackling this issue?

Professor John Quiggin, School of Economics:

Political debate over the past few years has been dominated by the ‘cost of living’. This is an understandable reaction to the fact that many items cost more than they used to before the arrival of the pandemic, a striking contrast to several decades of relatively low inflation. Unfortunately, it’s a misleading way of viewing the problem, which has led to sloppy and ineffectual policy responses. The ‘cost of living’ framing has led politicians to focus on the costs of particularly sensitive items, such as electricity, petrol and groceries, as well as on ad hoc tax reductions.

The problem today is that incomes – particularly wages – haven’t kept up with inflation. Worse still, the ‘cost of living’ framing has led governments and the Reserve Bank to oppose wage increases as ‘inflationary’. Only in the most recent wage case has the Labor government advocated a general increase in real minimum wages, though the Coalition remains opposed.

Q: Cost is a barrier to accessing healthcare. Are there any policies that could mitigate this?

Professor Brenda Gannon, School of Economics:

The budget allocated additional funds for Medicare to ensure all people can afford basic medical care from GPs and beyond. But the fundamental economic principle of equity needs to be considered. While universal healthcare coverage aims to provide free care to all, until the supply of primary care workforce has increased sufficiently, this may not be feasible. Hence the education of the health and care workforce is an imperative, to ensure more care is available, and with adherence to appropriate quality and safety standards.

For women, additional funds and increased rebates will assist those of reproductive age and will incentivise more women providers and women GPs to get involved in the service; however, older women have so far not been provided with additional healthcare benefits. As the cohorts of working women continue to contribute to the workforce, additional research and development expenditure will be needed to ensure a productive economy is sustained.

Q: Will Australians receive any tax breaks under each party?

Dr David Morrison, School of Law:

Tax breaks are promised, but they are minor and of no real significance. Labor is promising average tax cuts of around $43 per week for 2026-2027 with more to follow, although it is difficult to tell whether what follows is a further tax cut or a continuation with a slight increase. Either way, those amounts are taxpayers’ money and are unlikely to provide significant relief to the seriously inflationary environment we are currently experiencing.

The Coalition are doing much the same by promising tax offsets again, not operating until the 2026-2027 income tax year. Taxpayers are much better off where government commits to reducing government expenditure. The same effect is not achieved by offering taxpayers back a small fraction of the taxes they are already paying.

Q: What has caused Australia’s housing crisis and how can policy address this?

Professor Shaun Bond, Deputy Head of UQ Business School:

Australia’s housing crisis didn’t happen overnight. Years of underbuilding, planning delays, rising infrastructure costs and local resistance to development have all contributed to an undersupplied and unaffordable market. When the pandemic hit, the situation worsened: people moved to regional areas in record numbers, investors sold off rental properties, construction stalled, and material costs surged.

The result? Soaring rents, unaffordable home prices and growing inequality between those who own property and those locked out. Young Australians are struggling the most but housing stress now affects people of all ages, including those separating from partners, moving for work or entering aged care.

While there’s no quick fix, some encouraging signs have emerged. Rental growth is slowing in parts of the country, and home prices have stabilised. Governments are investing more in affordable housing, and the build-to-rent sector is expanding, offering a more professional and stable rental market.

Professor Brenda Gannon, School of Economics:

The affordability of housing is high on the agenda. While both parties propose some measures to alleviate the costs faced by younger families, there needs to be an additional focus on another large sector of the population: the ageing population who face a multitude of financial issues as they grow older. This includes single households with low income, older women who are often carers or with less retirement savings and also older men who may not have built up sufficient super funds.

The equity principle needs to be applied for accessibility to state pensions. The current situation of costs and homelessness will continue until a less fragmented approach to new models of housing is available.

Q: Labor is focused on supporting first home buyers to break into the market quicker with 5% deposits, whereas the Coalition wants to increase household borrowing capacity through access to superannuation and easing lending restrictions. Can you explain how each of these policies will impact a first-home buyer?

Professor Shaun Bond, Deputy Head of UQ Business School:

Labor’s plan focuses on lowering the deposit hurdle. By allowing eligible buyers to purchase a home with just a 5% deposit (while the government guarantees the remainder), Labor aims to help people buy sooner without needing to save a 20% deposit. This can be especially helpful for renters stuck in the cycle of high rents and slow savings. However, smaller deposits mean larger loans, which could leave buyers more vulnerable to interest rate rises and higher monthly repayments.

In contrast, the Coalition proposes giving first-home buyers access to their superannuation savings, introducing limited mortgage-tax breaks and easing lending restrictions. Allowing early withdrawal of super boosts the buyer’s deposit and borrowing power. While this can help buyers compete in a hot market, there is a concern that it may push up prices further and reduce long-term retirement savings. Easing lending rules could also mean riskier loans.

In short, Labor’s policy tackles deposit barriers directly, while the Coalition aims to increase overall buying power. Both approaches could help individuals buy sooner, but they also carry trade-offs, especially in terms of financial risk and long-term wealth.

Q: Is nuclear energy a viable energy solution? What are the pros and cons?

Professor John Quiggin, School of Economics:

Advocating a shift to nuclear power seemed like a potential compromise that would combine a continued nominal adherence to the 2050 target. As its advocates have pointed out, nuclear energy has low emissions. The safety risks are not as great as is often suggested, certainly far less than those of burning coal or oil. And, for countries that already have nuclear power, the costs of keeping it in operation are relatively modest.

Unfortunately, for a country starting from scratch like Australia, these considerations aren’t relevant. Even an absolute dictatorship like the United Arab Emirates took 15 years from the initial decision in favour of nuclear power in 2009 to the completion of four reactors in 2024. Australia would certainly take much longer pushing the arrival of nuclear power well beyond the last plausible date to keep existing coal plants operating. Moreover, nuclear power is so costly that no private investor will take it on, so that a nuclear strategy would require massive public investment with no guarantee of an adequate return.

Q: Australia is committed to reaching net zero by 2050. Will this be achievable under each party?

Professor John Quiggin, School of Economics:

Both Labor and the Coalition are officially committed to a target of net zero emissions by 2050, while the Greens have proposed a target date of 2035. Most independents have supported stronger action than that of the major parties, while right wing parties such as One Nation generally reject mainstream climate science. Agreement on the 2050 target conceals substantial differences between the major parties. 

Labor has endorsed an interim 2030 target in line with the Paris Agreement of 2015. They propose to achieve a 43 per cent reduction relative to 2005 levels, relying primarily on decarbonisation of electricity supply through a switch to solar and wind. Beyond that, there are some policies on transport and industrial emissions, though these seem inadequate to meet the 2050 target. 

The Coalition is dominated by opponents of any serious action to reduce emissions, but has retained a net zero commitment because of the adverse political consequences of abandoning it. The Coalition has already announced that it will water down the 2030 target and reverse most of Labor’s emissions reduction policies. Many in the party would like to drop the net zero target, but the political risks involved are seen as too severe.