Coalition offers tax cut up to $1200, Labor pledges 100,000 homes

Both leaders will also face questions about whether their big-spending policies will fuel inflation and where they will make savings to stop driving up the budget deficit.

Dutton said following the March budget that included Labor’s $536 a year tax cuts that “we won’t be able to provide tax cuts during this campaign” and vowed to repeal the law.

Three senior Coalition MPs and several other senior sources told this masthead in February that there was no discussion or plans for personal tax relief inside the shadow expenditure review committee, suggesting the tax offset policy was devised at short notice.

Labor’s housing plan would dramatically expand the current 5 per cent deposit guarantee scheme, which is limited to 35,000 people a year and only available to singles earning under $125,000 a year or couples on a combined income of $200,000.

Declaring he wants to help young Australians “achieve the dream of home ownership”, Albanese said: “When a young person saves a 5 per cent deposit, my government will guarantee the rest with their bank.

“This will help people buy their first home faster, without paying the burden of lenders mortgage insurance.”

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Labor has faced criticism for pursuing only piecemeal housing policies in its first term, with its signature Housing Australia Future Fund coming under fire for failing to build any new homes since it was established in late 2023.

Both leaders have only three weeks left to sway voters before the May 3 election and are aware they need to capture undecided voters’ attention before campaigning is interrupted by the Easter and Anzac Day long weekends.

Labor, which is launching its campaign in Perth for the second election running, will target its housing policy not only at frustrated Millennial and Generation Z voters but also their parents, who have become increasingly called upon to help top up housing deposits from the so-called “bank of mum and dad”.

Under Labor’s policy, which would take effect from the beginning of next year, a first home buyer will be able to buy a home at the median national house price of $820,000 with a deposit of $41,000.

The scheme would see the government guarantee 15 per cent of a property’s value, allowing first home buyers to enter the market with a 5 per cent deposit.

This would also allow them to avoid lenders mortgage insurance, which currently costs the average first home buyer $23,000 a year.

The only limit on the scheme, besides mortgage eligibility, would be price caps on property values that differ for cities and regional areas across the country.

First home buyers in Sydney would be able to access the scheme for property purchases up to $1.5 million, while Melburnians will be able to make purchases up to $950,000.

The $10 billion plan to build 100,000 new homes for first home buyers would comprise $2 billion in grants and $8 billion in zero-interest loans or equity investments.

State and territory governments will be required to match the $2 billion federal contribution to gain access to the program, which would see construction of the new homes begin in 2026 and buyers begin moving in from 2027.

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“Only first home buyers will be able to bid: they won’t be competing with investors, or people who have purchased before,” Housing Minister Clare O’Neil said.

“Young Australians are bearing the brunt of the housing crisis, and our government is going to step up to give them a fair go at owning their own home.”

Economists have traditionally been critical of government schemes targeted at first home buyers, arguing they can do more harm than good by driving up the cost of housing.

Labor announced in the March budget it would give all taxpayers a tax cut of $268 in 2026-27 and $536 a year following that at a cost of $17 billion over four years.

The tax offset policy echoes the low-and-middle-income tax offset introduced by the Morrison government ahead of the 2019 election and that expired in 2022.

Dutton’s day of campaigning on Saturday was overshadowed by Coalition frontbencher Jacinta Price saying she wanted to “make Australia great again”, a remark that delighted Labor strategists as they seek to tie the opposition leader to the unpopular US president.

With Shane Wright and James Massola

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