Executive Summary
As is customary, Peter Dutton last night delivered the Opposition’s Budget Reply speech in response to the Government’s Budget Papers released on Tuesday 25th March.
Against the beginning of the Election campaign following the Prime Minister’s visit to the Governor General today, the Budget Reply speech outlined the Opposition’s focus on five key pillars to support economic growth including:
Stronger economy – lower inflation
Cheaper energy
Affordable homes
Quality healthcare
Safer communitiesIf elected, the Opposition has committed to introducing four pieces of legislation on the first sitting day of Parliament:
- The Energy Price Reduction Bill;
- The Lower Immigration and More Homes for Australians Bill;
- The Keeping Australians Safe Bill; and
- The Guaranteed Funding for Health, Education and Essential Services Bill.
Key spending items included:
Key cost savings included:
Key Budget Reply Items
Inflation and & cost of living
The Opposition has pledged to repeal the Government’s $17.1bn income tax cuts which were passed in Parliament the day after Budget.
In place of these tax cuts, the Opposition has instead outlined how it will temporarily halve the fuel excise collected per litre for 12 months (effectively an approximate 25c per litre reduction). Mr Dutton noted in his speech that the Opposition will work with industry and the ACCC to ensure the cut is passed on to consumers in full.
The Opposition has also already pledged to match the Government’s proposed extension of the energy bill rebates, at a cost of $6.8bn.
The Opposition has committed $50 million in funding for food charities – which were noted to include Foodbank, SecondBite and OzHarvest – to expand their services and to include school breakfast programs.
Economic Growth
The Opposition has vowed that, if elected, in its first time it will seek to remove regulatory burdens across the economy. This includes duplications across state and federal requirements for businesses.
The Budget Reply outlines the already announced policy item of allowing small businesses with a turnover under $10m to claim tax deductions of up to $20,000 for meal and entertainment expenses (excluding alcohol beverages), designed to stimulate the hospitality sector and providing small businesses with cost relief to entertain staff.
The Opposition also pledged to increase the instant asset write-off threshold to $30,000, allowing small businesses an immediate tax deduction on the purchase of eligible assets, with the aim of helping small business invest in new equipment and technologies.
The Budget Reply announces the Opposition’s plans to restore targeted and proven incentive payments for employers with small and medium businesses to be provided with up to $12,000 to hire and train new apprentices in critical skills areas. The Opposition has set a target of 400,000 apprentices and trainees in training across Australia.
Energy
In order to try to reduce energy prices broadly, the Opposition has announced a National Gas Plan to prioritise domestic gas supply and establish an east coast gas reservation, requiring a proportion of each exported amount to be delivered to the domestic market.
The Opposition has pledged $1bn to establish the Critical Gas Infrastructure Fund for gas pipeline and storage projects and $300m to reinstate the Strategic Basin Plan, all with the aim of driving down wholesale gas prices.
The Budget Reply also recommitted to a previously announced proposal to develop nuclear power plants in Australia, to be up and running by 2036.
Healthcare
The Budget Reply outlined the Opposition’s overall $9.4bn investment into healthcare which will be designed to boost falling bulk-billing rates, invest in hospitals in high-population growth areas and incentivise doctors to work as GPs.
The Opposition outline pledges to:
- guarantee cheaper medicines and lower the Pharmaceutical Benefits Scheme co-payment to $25;
- match the Government’s $500m investment into women’s health;
- double the number of subsidised mental health sessions per annum (from 10 to 20); and
- invest an additional $400m into youth mental health services.
Housing & Migration
The Opposition has pledged to cut permanent migration by 25 per cent while also matching the Government’s pledge to ban foreign investors and temporary residents from purchasing existing homes for up to two years, which they claim should free up more Australian homes for Australians and restore more Australian home ownership.
The Opposition announced a $5bn investment plan on essential infrastructure focused on stalled housing projects in order to create up to 500,000 homes.
The Opposition has also proposed to allow first home buyers to access up to $50,000 from their superannuation for use as a deposit to purchase a home.
Andersen Comment
The Opposition’s Budget Reply sets out a comprehensive policy alternative in the lead-up to the federal election, with a particular focus on cost-of-living relief, energy policy, and incentives for small business investment and employment. Many of the proposed measures are framed around immediate household and business support, including the temporary halving of fuel excise and an increase to the instant asset write-off threshold.
The commitment to targeted infrastructure investment and unlocking stalled housing projects indicates a policy direction aimed at boosting supply-side constraints in the housing market, while the proposed reduction in migration levels is intended to ease demand-side pressures. These measures are likely to attract interest from property developers, investors, and first home buyers, particularly in conjunction with the proposed access to superannuation savings for housing deposits.
On energy, the focus on gas supply and infrastructure, including the proposed Critical Gas Infrastructure Fund and strategic basin planning, reflects a pivot towards domestic energy security. The renewed discussion around nuclear energy, while long-term in nature, signals a broader conversation on energy transition strategies.
In the business context, the proposed deductions for meal and entertainment expenses, together with apprentice subsidies and regulatory reduction commitments, are designed to support small and medium-sized businesses (SMEs) in both workforce and operational terms. These initiatives, while stimulating the hospitality sector that has suffered from the pandemic period, may have cash flow and planning implications for eligible businesses and warrant further detail as election policies are refined.
While the measures remain subject to legislative passage and electoral outcomes, the proposals flagged in the Budget Reply signal the key policy levers a future Coalition government would look to pull, with a focus on near-term relief and longer-term structural shifts.
