Time to read : 7 Minutes
Cost of living is one of the biggest challenges facing households in Australia, so it's no surprise that our politicians are focusing on this in order to win your vote.
But what are the policies that the pollies think can make a difference to your wallet and will they actually help?
Here’s what's being proposed and what these policies could mean for your bottom line.
Tax cuts
Tax cuts are a favourite of politicians courting your vote and Labor announced two top-up tax cuts in the most recent budget. But these ones don’t come in until 1 July 2026 followed by 1 July 2027.
For any Aussie earning above $45,0000, it will give $268 back in the pocket annually, followed by a $536 annual saving for the second cut. For more information try the tax cut calculator.
What does this mean for your bank balance?
This boils down to $5 a week in 2026, followed by $10 a week a year later which is unlikely to make a dent on household budgets, given it barely covers a cup of coffee or loaf of bread.
The Coalition has vowed to repeal the tax cuts if elected. What they are promising instead is cuts to the fuel excise.
Fuel Excise
Peter Dutton is promising to provide immediate cost-of-living relief by halving the fuel excise added to petrol for a year. This would cut the excise from 50.8 cents per litre to 25.4 cents.
What does this mean for your bank balance?
It depends on whose modelling you believe.
Dutton says drivers that fill up a 55 litre tank each week could save around $750 a year
AMP chief economist Shane Oliver disagrees, saying that the average fuel consumption per week is 35 litres, so the yearly saving is closer to $455.
Extension of energy rebate
Energy bills regularly top the list of financial worries in Compare Club’s bi-annual Bill Stress Index. The government has extended the energy rebate for another six months, from 1 July 2025.
The payment of $150 will be applied in two quarterly amounts to help households pay for energy bills.
Although any form of financial support can be helpful to households finding it tough, Compare Club research showed that almost 1 in 2 Aussies (49.46%) found the previous rebate of $300 insufficient at relieving energy bill stress.
While the Coalition has said it would honour Labor’s energy rebate commitment if it won the election, Shadow Treasurer Angus Taylor has said they don’t feel this addresses the core issue.
The Coalition has already announced a number of energy-related policies, including:
a National Gas Plan to prioritise domestic gas supply, shortfalls and reducing prices.
establishing a nuclear power industry by building seven nuclear power plants in regional Australia, with the first reactor operational around 2035 or 2037.
What does this mean for your bank balance?
There’s a lot to unpick in energy, so it’s over to our resident energy expert Paul Coughran.
“While there are arguments for and against nuclear energy, what we do know is that all reliable cost analysis completed to date would suggest it is a more expensive wholesale option,” says Paul.
“The extension of the Government rebate could be a welcome relief to households struggling the most with their energy bills, but for NSW residents the rebate will be offset by an annual increase of up to $200 compared to the current Default Market Offer.”
Ultimately, Paul says that rather than wait for politicians, take the power into your own hands: “Regularly comparing your energy bills still remains the best option for customers looking to save money.”
Health matters
Medicare and prescription medicine
Both parties are addressing the cost of healthcare and, for now, are on the same page for:
Expanding bulk billing so more Aussies can access free GP visits, with the aim of having nine out of 10 GP visits bulk-billed by 2030.
Capping the maximum cost of medicines listed on the Pharmaceutical Benefits Scheme (PBS) from $31.60 to $25, from 1 January 2026.
What does this mean for your bank balance?
It’s rare to find the two main parties in consensus and the policies have been broadly well received. Bulk billing will take longer to kick in than PBS changes, so don’t expect to see your local GP offering more bulk billed appointments immediately.
Mental health
Mental health treatments can cost on average between $100 and $400 per hour depending on the professional service. Mental Health Australia has spoken out about the lack of investment announced in the budget, particularly as 1 in 5 Aussies will experience a mental health condition in any given year. But that doesn’t necessarily mean it’s not on the election agenda.
Here’s a guide to what’s being tabled.
Over a four year period Labor has pledged to fund an existing digital mental health service.
The Coalition has pledged to invest in youth mental health services, and expand the National Centre for Excellence in Youth Mental Health.
The Coalition is also promising to increase the number of mental health sessions from 10 to 20 for Aussies with a mental health care plan. This service was in high demand during the pandemic but shortly after was reduced from 20 to 10 sessions. Providing an extra 10 sessions would not only allow significant savings but could help Aussies seek extra mental health support.
What does this mean for your bank balance?
Our research has shown that 46% of Aussies feel that mental health concerns are not adequately addressed by the health care system, making it a major financial hurdle for accessing treatment.
“Mental health support has been long neglected by both parties and while these proposed initiatives are welcome this isn’t fixing the root cause of the issues of our mental health system whatsoever,” says Kate Browne, Compare Club’s Head of Research and Insights.
“There is also a conversation that really needs to be had around how private health insurers can provide better inclusions as so many Australians, including young people increasingly require mental health support, yet for so many it’s totally out of reach financially,” says Kate.
Women’s health
The lifetime cost of healthcare for women far exceeds that of men, so it’s refreshing to see both parties are pledging changes.
The Albanese government is promising $573 million to women's health with initiatives including:
An increase to Medicare rebates for some contraceptives.
Creation of a new rebate for menopause health assessments.
Nation-wide expansion of endometriosis and pelvic pain clinics from 22 to 33.
The Coalition has said they are committed to matching Labor’s funding for women’s health but the specific plans are yet to be revealed.
What we do know is they’ll review women's healthcare items to identify gaps in services and subsidised medications for women.
What does this mean for your bank balance?
It’s hard to tell. It’ll be welcome but the proof will be a long way off regardless of who gets elected.
“While the government's initiatives are very welcome and overdue, there is still plenty of work to be done in the space of women’s health. Our research shows that women are disproportionately affected by chronic health problems and bear the cost of those problems too, despite earning less,” says Kate.
Housing affordability
Housing affordability is going to be one of the key topics at this election, if Compare Club’s research is anything to go by – almost 80% of Aussies expressed concern about housing affordability. So what’s being proposed...
First off Labor will expand the Help to Buy scheme.
The scheme allows eligible first time home buyers to purchase a home with a 2% deposit while the government covers part of the cost but can be bought out later.
Eligibility will be expanded to single people earning less than $100,000 (previously $90,000) and couples earning less than $160,000 (previously $120,000).
The maximum price of properties eligible under the scheme will also increase. For example the NSW capital city and regional centres cap would increase from $900,000 to $1.3m.
Labor is also planning to open up the First Home Guarantee Scheme to all first home buyers by removing income and placement limits. This could allow Aussies to buy a property with a 5% deposit without the need to pay Lender’s Mortgage Insurance (LMI) (which is generally required when you don’t have a 20% deposit).
Meanwhile, the Coalition has announced plans to expand the First Home Guarantee Scheme with new income caps of $175,000 for singles (up from $125,000) and $250,000 for joint applications (up from $200,000). They also will increase property price thresholds and lift the caps on the number of places available.
The Coalition has unveiled the First Home Buyer Mortgage Deductibility Scheme.
This scheme would allow first home buyers of newly built homes to claim a tax deduction on the interest paid on the first $650,000 of their mortgage. There would be no caps on the home price or size of mortgage.
The Coalition hasn’t said much about changes to the Help to Buy scheme but their original headline policy centered around allowing first home buyers to access their super – up to $50,000 – to purchase a home. These funds would need to be returned if the property is later sold.
They also announced that it would direct the regulator (APRA) to reduce the serviceability buffer to 2.5% when assessing an applicant’s ability to repay a loan.
💡 A serviceability buffer is added by banks when you take out a home loan to ensure you – the borrower – can still pay the loan when circumstances change, for example when there’s a rate rise, reducing the risk of defaulting on the loan.
What does this mean for your bank balance?
We turned to Compare Club’s in-house front of home loans knowledge, former mortgage broker turned personal finance writer Gillian Clive.
“Both housing policies are designed to improve access to home finance – meaning it should be easier to get a home loan and of course, owning your home. Adjusting the serviceability buffer will help do this. So will widening the eligibility for the Help to Buy scheme,” says Gillian.
“The knock-on effect of policies that make access to finance easier is that house prices tend to go up because there are more buyers in the market. This could lead to further affordability issues. Using your super to get onto the property ladder can work right now, but it could impact your retirement nest egg later on.”
Be aware: always check with a financial professional before applying for early access to super.
HECS student loans
There’s some more good news for anyone with a student loan debt.
From 1 July 2025, the minimum income threshold for repayments will be raised to $67,000. This is a considerable jump up from the current thresholds of $54,435.
The Albanese government has also promised to cut 20% off all student loans.
The Coalition has currently not committed to this cut.
What does this mean for your bank balance?
A higher threshold may mean it could take longer for some people to start paying off their student debt. With indexation applied each year, it also means that the total amount owed does increase with time. The longer it takes to reach the repayment threshold, the greater your total owing amount is likely to be.
While the 20% cut to student loans is a significant reduction, it’s a one-off so the financial savings would only apply to anyone currently with student debt.
Bottom line
If cost-of-living relief is important to you, then keep on paying attention to what the politicians are promising – and what experts in these areas say about the plans.
In most cases, it’s less clear cut than the pollies would have us believe, but there are also some promises from both sides that seem to have been well received.
Ultimately, do your research and make your vote count for what you believe will be best for you. You won’t get another chance for another four years.
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Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
