Opinion piece: Sustained support to help with the cost of living

Australian Treasury

We know many Australians are strapped right now. Inflation is coming down but high prices are still hurting.

That’s why the Albanese Government has been so focused on helping with the cost‑of‑living challenge faced by families across the country.

It’s why the centrepiece of next month’s Budget will be tax cuts for every one of the nation’s 13.6 million taxpayers to begin flowing from 1 July.

We want Australians to earn more and keep more of what they earn, and the tax cuts will help make that happen.

We’ve made sure they deliver more relief to middle Australia in a way that doesn’t add to inflation.

We’ve made sure this tax relief comes with tax reform – boosting the amount of workers in our economy, returning bracket creep and helping more women into work if they want to.

Labor’s tax cuts are the biggest part of our cost‑of‑living relief but not the only part.

We’ve already rolled out energy bill relief to up to 5 million eligible households and one million small businesses, which has helped limit electricity price rises since mid‑2023 to 3 per cent. Without our energy rebates, prices would have increased 18.1 per cent, according to the Australian Bureau of Statistics.

While some of the cost‑of‑living measures are time limited and temporary, what’s less appreciated is that most of the Albanese Government’s help is ongoing.

That means it provides significant support for Australians to make ends meet today and will continue to do so in the months and years to come.

We’ve made childcare cheaper, we’ve made it easier to see a bulk billing doctor, we’ve made medicines cheaper, we’ve delivered more fee‑free TAFE places, and we’ve expanded Paid Parental Leave.

In September last year, we boosted income support and funded the biggest increase in Commonwealth Rent Assistance in 30 years.

Not only are these changes permanent, but the automatic indexation of these payments means bigger increases going forward because of the higher base rates.

Policies like these are helping address the cost‑of‑living pressures around the kitchen table and around our economy.

While it’s certainly not mission accomplished, it’s clear that inflation is moderating.

Quarterly inflation is now around a third of the 2.1 per cent we inherited from the former government.

Our policies took half of a percentage point off inflation to the end of last year.

The welcome moderation in inflation has helped deliver the return of real wages growth after a decade of deliberate stagnation under our predecessors.

Annual real wages are now growing for the first time in nearly three years and ahead of schedule, helped by the Government’s policies. They were going backwards by 3.4 per cent at the time of the election.

This improvement means Australians are earning more, and Labor’s tax cuts mean they will keep more of what they earn too.

New analysis shows that average weekly ordinary full‑time earnings are now $98,217.60 a year, an increase of $119 per week we came to office. As a result of this growth in earnings and the impact of Labor’s tax cuts, this full‑time worker’s annual take home pay will be $6,188 higher on 1 July.

Not only are wages rising, but there are more jobs too. In fact, more than 1,000 jobs have been created each and every day under the Albanese Government – the highest daily average on record for an Australian government and about double the rate of our Coalition predecessors.

As a Labor Government, we will continue to do what we responsibly can to help Australians under the pump.

That’s something we will demonstrate in our third budget we hand down on 14 May.

It will be a responsible budget, built on the significant and sustained cost‑of‑living support the Albanese Government has already delivered in its first two budgets.

We will strive for the best balance of relief, repair and reform: cost‑of‑living relief built on a tax cut for every single taxpayer; repair of the budget; and reform of our economy to build a future made in Australia.

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