Australia announces surprise tax cuts as PM Albanese tries to win back voters ahead of polls

The Australian government on Tuesday announced fresh tax cuts and other budgetary reliefs to help Prime Minister Anthony Albanese secure a second term in office in the upcoming elections.

Albanese’s government is trying to win another term amid dissatisfaction among voters as pre-poll surveys show a neck-to-neck fight with the conservative Coalition opposition.

With a possible election just days away, Treasurer Jim Chalmers is working to regain support from voters frustrated by soaring living costs, high interest rates, and a persistent housing shortage in the post-COVID era.

What does the budget offer?

Chalmers, in his fourth budget, unveiled new efforts to boost economic resilience and competitiveness, acknowledging heightened new global risks from trade wars as well as geopolitical tensions.

“This budget is really a platform for prosperity in a new world of uncertainty,” Chalmers said in a press briefing. “It recognises the cost of living pressures are front of mind for many Australians.”

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However, the two new rounds of tax cuts, worth A$17.1 billion ($10.7 billion), came mostly as a surprise and build on those introduced last year.

Through cutting the lowest tax bracket, a worker on average earnings will get a new tax cut of A$268 in the fiscal year ending June 2027 and A$536 in the following fiscal year, more modest than the A$1,654 relief in the tax cuts introduced this fiscal year.

The budget also features an A$8.5 billion investment in public healthcare. It will also extend electricity rebates until the end of the year, roll out funding for public schools and cut student debt.

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Australian elections

Australia is preparing for its federal election, anticipated to occur in May. The elections dates are expected to be announced in the coming weeks.

The political landscape features key players and emerging candidates. Prime Minister Anthony Albanese leads the Labor Party, seeking re-election with policies aimed at addressing cost-of-living concerns and enhancing public services. The Liberal-National Coalition, under Opposition Leader Peter Dutton, focuses on economic management and national security to regain voter confidence.

With inputs from Reuters