By Eleena Li (University of Melbourne)
With the 2025 Federal election fast approaching, selecting the right candidate to represent Australia’s best interests is at the forefront of many of our minds. For young people in particular, the cost-of-living crisis, HECS debt, and the housing crisis mean we are increasingly concerned with economic and financial matters, and our votes will be heavily influenced by our economic interests. With that, analysing and comparing the economic policy of different political parties can help you make an informed choice of who to vote for — for the sake of your economic future and Australia’s economic future alike.
This article will only provide a brief rundown of the proposed economic policy for the Australian Labor Party (ALP), and the Liberal National Coalition (LNP). For information on any other party or candidate, visit their respective websites or social media accounts.
Labor — a party of the Labour class?
The ALP’s ideological tenets were founded off the ideals of the Labour movement, so conceptually, Labor is a party of the working class. Originally a self-described democratic socialist party, the ALP’s 1921 constitution set out its aims and objective of “the democratic socialisation of industry, production, distribution and exchange” to eliminate the exploitation of the working class in these fields.
However, since its conception, the ALP has undergone significant economic reform, in both its “Labor Right” and “Labor Left” factions. Described as the “continuity/discontinuity thesis”, under the Hawke/Keating administrations, the ALP adopted what can be interpreted as a neoliberal fiscal policy — privatising government-owned assets such as banking and industry. Later, from 1990 – 1991, all trade tariffs were reduced to 5%, expanding Australia’s role in the free market. This is described as the “discontinuity” component of the thesis, as Labor has supposedly strayed from its original working-class values.
So, history aside, what economic framework guides the ALP today? Australia has lived in a majority Labor government for almost three years now, and during this time, our nation’s economic health has fluctuated.
Ultimately, what happens to the economy is mostly out of the control of any politician – especially in the short term. We can, however, analyse the response of parliamentarians to decisions dictated by the Reserve Bank.
In its first term, Albanese’s Labor government saw the Reserve Bank raise interest rates to a 12-year high in November 2023 as inflation peaked at a staggering 8.4%. Between May 2022 and February 2025, consumer prices increased by 11 percent in total, as Australians battled the cost-of-living crisis. Not all goods were affected equally, with the price of an international holiday (+45%), a carton of eggs and insurance (+36% respectively) facing the largest price hikes. However, the sharpest price falls were in areas subsidised by the Albanese government through taxpayer funds, including electricity (-11%) and childcare (-5%), as per the Australian Bureau of Statistics.
The ALP’s management of the cost-of-living crisis has faced opposition and criticism from both the Coalition and the Greens, with the latter describing the crisis as a fault of big corporations and the Labor government.
On the other hand, the Albanese economy also saw a budget surplus of 22.1bn dollars in 2023, Australia’s first budget surplus in 15 years. A budget surplus, or where government revenue exceeds spending, generally means the economy is stable and managed well. Excess revenue may also be invested back into spending, which, in Australia’s case, would alleviate pre-existing debt. The Australian Bureau of Statistics reported the economy grew by 0.6 in last year’s December quarter, indicating some degree of economic turnaround.
Heading into the election, Labor’s proposed policies include investment into bulk billing, building 1.2 million homes in five years, cutting HECS debt by 20% and making free TAFE permanent. It is important to note that these election pledges are not promises, as bills still have to pass through government, and the ALP might make changes to their proposals, such as making smaller tax cuts than those proposed in 2022, with those earning above 150,000 seeing a smaller tax cut than they otherwise would have.
The Liberal-National Coalition
Aside from Labor, Australia’s other major party is the Coalition. Consisting of the Liberals and the Nationals (with the Liberals being the clear dominant force), the party is ideologically very different from Labor, as its conception was based around protectionist policies, as well as a fear of socialism and the labour movement.
Like Labor, the Coalition (primarily the Liberals) has changed its approach to managing Australia’s economy multiple times. Under the Menzies government, taxes were increased to combat a huge spike in inflation in 1951, as Robert Menzies, coined “the father of liberal politics” saw no issue in using a Keynesian approach to balancing the economy. More recently, the party has operated under a more neoliberal model, prioritising lower taxes and an efficient private sector.
Scott Morrison’s second term saw a struggling economy. The Coalition’s recent ruling period came at the same time as the COVID-19 pandemic, where lockdowns brought unprecedented changes to the nation. On the 2nd of September 2020, the Australian government officially announced the country was in a recession, as the GDP fell 7.0 per cent in the June quarter, the largest quarterly decline on record.
Before COVID, however, the Liberals delivered a relatively successful economy under the guidance of Treasurer Josh Frydenberg. The Liberals were able to deliver a smaller budget deficit than forecast for 2017-2018, with the final budget outcome showing a deficit of $10.1bn, $19.3bn less than the forecast $29.4bn. Frydenberg stated the smaller deficit was the result of a strong economy and a smaller unemployment rate orchestrated by the LNP.
According to their website, a Dutton government would strive for low inflation, lower taxes to promote economic growth, and accelerate approvals in the mining and resources sector, compromising efforts to fight climate change. They also plan to increase export opportunities for Australian farmers and businesses, amongst other things. Again, whether these plans are achieved are up to parliament and the competency of the Dutton government.
The Election
Ultimately, who you decide to vote for comes up to you and your own interests. When comparing the campaigns of Labor and the LNP, it is clear that both parties want to do something to alleviate the cost of living pressures; Labor plans to do this through tax cuts, strengthened Medicare and energy bill relief, building affordable housing, alongside wiping 20% off student debt. For students, this may act as a deciding factor. On the other hand, the Coalition plans to curb inflation, deliver cheaper energy and affordable housing through boosting the housing supply and “rebalancing migration”. Like Labor, they also plan to increase Medicare funding. Again, these are all just campaign promises – there is no certainty as to whether they will be carried through.
Economics aside, consider other policy points of respective parties, and conduct individual research into their party values and party history. It is also important to note that Australia has a preferential voting system – the ALP and the Coalition are not the only parties you can preference first. So, when it comes to election day, vote seriously, and vote well. Your decision will contribute to shaping Australia’s future.
Articles Cited
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