Labor wins the 2022 election: What does this mean for your wallet?
The new government has pledged to make childcare and medicine cheaper. And it will help you buy a house - together.
The Australian Labor Party has won the 2022 federal election. Questions about housing affordability and the rising cost of living were central to this election, along with climate change. So how will the incoming government impact your finances?
To answer this question we've rounded up some major policies the Labor Party took to the election that will affect Australians' pockets. This comes with 2 big disclaimers:
- We're basing this analysis on campaign policies, not legislation. What parties promise at election time is always going to differ from decisions they make in government.
- The new government will almost certainly have to negotiate legislation with the Senate crossbench, and possibly in the House of Representatives as well.
Childcare costs could get cheaper
Australians spend more of their average wages on childcare than almost any country in the OECD. The Labor Party has promised to spend $5.4 billion from 2023 to make childcare cheaper.
The new government has pledged to:
- Increase the maximum childcare subsidy rate for a family's first child.
- Keep subsidy rates for families with additional children.
- Extend subsidies for out of school hours care.
These subsidy rates will still be subject to the same income tiers as the current subsidies. So if your family's total income is $75,000, you'll get a 90% subsidy. At $150,000, a 76% subsidy.
More affordable medicine, especially for seniors
Labor has plans to lower the costs of medication by reducing the Pharmaceutical Benefits Scheme (PBS) co-payment. This means you won't have to pay more than $30 per script. That's down from $42.50 currently.
More seniors will be able to get a Seniors Health Care Card under the new government. Labor plans to substantially increase the income test threshold for seniors to access the card. The threshold will rise from $57,761 a year up to $90,000 for singles. For couples it rises from $92,416 up to $144,000.
This means more seniors will get access to cheaper medicine under the PBS as well as other discounts on energy bills, public transport, council rates and dental and eye care (these benefits vary by state and local council).
Help to buy a house
One of Labor's signature election policies is the Help to Buy scheme. Under this scheme, 10,000 buyers a year will be able to purchase properties with deposits as low as 2%. The government will then contribute some of the purchase price, up to 40% for a new home and 30% for an established home.
It's a shared equity scheme, meaning the government will buy with you, and own part of the property. When you sell, the government will get an equivalent share of the profit in proportion to how much it contributed.
So that's a pretty big catch. But it's also quite significant support. It can take years to save a 20% deposit on a home in a city like Sydney or Melbourne. The new government is essentially going to slash those entry costs while also helping buyers avoid lenders mortgage insurance (LMI).
Given that LMI can cost thousands, this is a big benefit too.