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What the new Labor government means for your finances

What the new Labor government means for your finances

With a new Labor government being sworn in following the 2022 federal election, many Australians may be wondering what the election result means for their finances, now and in the future. Several new Labor policies are expected to supplement existing federal government programs to provide Australians with economic support.

New policies

Labor came to the election with an assortment of policies, including plans to tackle the following issues:

Housing affordability

  • The Help to Buy program is to allow eligible Australians to buy a property with help from the government, who will cover up to 40% of the purchase price. However, when the property is sold, the government would get back its equity, plus any capital gains on its portion of the home.
  • A Regional First Home Buyer Support Scheme to help 10,000 first home buyers a year in regional Australia to buy a home
  • A $10 billion Housing Australia Future Fund to build 20,000 social housing properties (4000 of which will be allocated for vulnerable women and children) and 10,000 affordable homes for the frontline workers
  • Restoring funding for homelands and improving remote housing for First Nations Australians
  • Establishing a National Housing Supply and Affordability Council
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Cheaper energy 

  • Rewiring the Nation: A plan to rebuild and modernise the national power grid, including integrating the full capacity of the growing renewables sector
  • Powering Australia: A plan to create jobs, cut power bills and reduce emissions by boosting renewable energy

Cheaper childcare

  • Lifting the maximum child care subsidy rate to 90 per cent for families for the first child in care
  • Increasing child care subsidy rates for every family with one child in care earning less than $530,000 in household income
  • Keeping higher child care subsidy rates for the second and additional children in care
  • Extending the increased subsidy to outside school hours care

Secure Australian jobs

  • 465,000 fee-free TAFE places for Australian students studying in industries with a skills shortage, including 45,000 new places
  • Up to 20,000 extra university places over 2022 and 2023, making it easier for Australians to find a spot at university and get a job.
  • Training thousands of workers by ensuring one in ten workers on major government projects is an apprentice, trainee or cadet
  • Establishing Jobs and Skills Australia as a national partnership to drive VET education and strengthen workforce planning by working together with employers, unions and the training and education sector
  • Enshrining secure work (with sick leave and holiday pay) as an objective of the Fair Work Act
  • Making wage theft illegal
  • Closing the gender pay gap

Cheaper electric vehicles (EVs)

  • Electric Car Discount, including exempting EVs below the luxury car tax threshold for fuel efficient vehicles ($77,565 in 2020-21) from import tariffs and fringe benefits taxes
  • Developing a National Electric Vehicle Strategy to increase electric car sales and infrastructure and to encourage Australian manufacturing of electric car components (especially batteries) and possibly cars themselves.

Existing policies

While the government has changed hands, several of the programs put in place by the Coalition are set to continue.

For example, under a Labor government the National Housing Finance and Investment Corporation (NHFIC) is set to be renamed Housing Australia, but it will continue to provide the following home buying assistance schemes:

  • First Home Loan Deposit Scheme (FHLDS): Allows eligible first home buyers to apply for a mortgage with a 5% deposit, with the government to guarantee up to 15% or the property value.
  • New Home Guarantee: Similar to the FHLDS, but for purchasing a newly-constructed property
  • Family Home Guarantee: Allows eligible single parents with at least one dependent child to purchase a family home, regardless of whether that single parent is a first home buyer or a previous home owner, with a deposit as small as 2%, as the government will guarantee up to 18% of the property value.

Additionally, in the lead-up to the election, Labor promised to offer similar tax relief as the Coalition, through legislated tax cuts to benefit everyone with incomes above $45,000, and to also increase the low-and-middle income tax offset by $420 this year.

For more information on the new government's plans for the future, visit the ALP website for policy details.

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This article was reviewed by Mia Steiber before it was published as part of RateCity's Fact Check process.

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