Over the past year, governments across Australia enacted billions of dollars in cost-of-living relief.
At a state level, pauses on transportation fares, toll road caps and back to school support has been widespread.
Federally, increases in Commonwealth Rent Assistance, cheaper medicines, and energy bill relief have characterised the Albanese Government’s response.
The recently announced changes to the Stage 3 tax cuts, too, will deliver more relief for those who need it most.
These measures are important and are making a difference.
But as cost of living pressures remain, there are opportunities to explore additional policies that will help ease the financial burden on Australian households.
Our Federal Budget submission tables six further ideas to address the cost of living
As the Commonwealth prepares for the May budget, our submission amplifies six ideas aimed at alleviating pressure on households.
These policies are simple, readily implementable, and won’t make a meaningful impact on the Commonwealth budget.
Importantly, they will also have a negligible impact on inflation.
Idea 1: National temporary toll relief for commuters in Sydney, Melbourne and Brisbane. Non-tolled jurisdictions should be provided with commensurate deferred infrastructure grants equivalent to the toll subsidies.
Idea 2: Low-interest emergency loans of $750 available twice per year to households earning under $100,000 via MyGov. Such loans would bear the same interest rate as the ten-year Australian government bond, and prevent predatory payday lenders taking advantage of vulnerable Australian households.
Idea 3: Optional additional PAYG returns for second job holders to ensure that workers get access to their own money sooner. This is particularly salient for seasonal workers, who are often subject to excessive withholdings over short periods of time.
Idea 4: Making imports cheaper by temporarily cutting tariffs and GST on imported goods. Crucially, this policy would increase household consumption while not contributing to domestic inflation.
Idea 5: Assessing tertiary loan repayments marginally to make sure that those with training loans are not subject to unforeseen lump-sum repayments, and to fix the perverse outcomes and incentives generated by the lump-sum repayment regime.
Idea 6: Eliminating non-compete causes for most workers to make sure that Australian workers can change jobs without being unfairly restricted by their previous employer. Macroeconomically, this would contribute to greater innovation, productivity, and wage growth.
These interventions complement other cost of living relief
The best thing, in the medium to long term, for governments to do to address the cost of living is to normalise the rate of inflation and to achieve real-wages growth — where the pace of wages outstrips the pace of rising prices.
This is best achieved by both increasing labour productivity and the bargaining power of workers.
But this can’t be achieved overnight. And in the interim, there are levers government can pull to provide urgent relief for those most in need.
You can read our budget submission in full here.
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