Buoyed by official launches replete with rousing speeches and expensive policies, Labor and the coalition have a swag of big-ticket promises to sell voters as the election campaign hits full swing.
With one week of the campaign to go before early voting begins, both sides know every day is crucial.
Prime Minister Anthony Albanese is kicking off his week in Adelaide, where he will spruik two of Labor’s centrepiece promises announced on Sunday – an automatic $1000 deduction on tax returns and a plan to help first homebuyers into a property.
Housing, an issue at the forefront of voters’ minds, dominated both parties’ campaign launches.
Shifting demographics mean young voters – millennials and gen Z –
will have more influence on the election result than ever, outnumbering older voters at the polls for the first time.
Research by Monash University found that three in four voters younger than 24 wanted immediate action on affordable housing.
With young voters in his sights, Opposition Leader Peter Dutton will be in Brisbane on Monday, spruiking the coalition’s plan to make interest payments on the first $650,000 of a mortgage tax deductible for first homebuyers if elected on May 3.
That could save the average first homebuyer an average of $10,000 a year.
The plan has found few friends among economists, who say it would disproportionately benefit high-income earners, push house prices up by increasing demand, and blow a hole in the federal budget.
Likely to cost taxpayers $1.25 billion in forgone revenue across four years, it’s not money well spent, Grattan Institute chief executive Aruna Sathanapally said.
“The money will overwhelmingly flow to higher income earners because they have higher tax deductions,” Dr Sathanapally told ABC News.
“It’s not good policy.”
Labor’s housing plan was not showered in praise either.
First homebuyers would need to save up just five per cent of a deposit under Mr Albanese’s plan, presenting the same issue of increasing demand and making housing less affordable for everyone else.
But the other prong of Labor’s housing pledge – building 100,000 new homes for first homebuyers for $10 billion – got more love, as it would go some way to tackling the underlying issue of insufficient supply.
Not wanting to be outdone, both sides offered additional tax sweeteners to voters on a bad day for the budget bottom line.
The coalition promised to bring back the COVID-19-era low-and-middle-income tax offset for one more year, giving taxpayers a one-off sugar hit of up to $1200.
The Morrison-era offset, colloquially known as LMITO, was intended as a temporary measure to smooth taxpayers through the stage three tax cuts.
Steven Hamilton, an economist at the George Washington University, said the government was right to let it die because it increased the marginal tax rate, worsening incentives for people to work.
Labor’s tax deduction policy, on the other hand, got his tick of approval.
It would reduce compliance costs, benefit millions of taxpayers without making anyone worse off, make the tax system more progressive and save hundreds of millions of dollars per year in accounting and legal fees.
“A fantastic tax reform,” Professor Hamilton wrote on X.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
