Australia Votes Amid Inflation, Housing, China Concerns

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Australia Votes Amid Inflation, Housing, China Concerns \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Australians vote Saturday in a national election shaped by economic anxiety, housing affordability, and foreign policy tensions with China. The major parties differ sharply on energy strategies, immigration, and how to tackle rising living costs. Voters are also weighing diverging paths to net-zero emissions by 2050.

Quick Looks

Key Issues: Inflation, housing, energy policy, and China relations
Economic Backdrop: High interest rates, inflation easing but still elevated
Housing Crisis: Rising rents, construction delays, policy gaps
Net-Zero Path: Labor backs renewables, opposition pushes nuclear
China Relations: Labor favors engagement; opposition takes a hardline
Labor Goals: 43% emissions cut by 2030, 1.2 million homes built
Opposition Proposals: Use super for home deposits, 7 nuclear plants
Election Date: Saturday, across all Australian states and territories

Deep Look

As Australians head to the polls Saturday, they do so against a backdrop of economic strain, housing pressure, energy debate, and geopolitical uncertainty—a mix of domestic and international issues that have shaped one of the most ideologically charged general elections in years.

Prime Minister Anthony Albanese’s center-left Labor Party, elected in 2022, faces a tough re-election fight, as voters contend with the lingering effects of post-pandemic inflation, rising interest rates, and a scarce housing market. Meanwhile, the conservative Liberal-National Coalition, led by Peter Dutton, is seeking a return to power with a message centered on fiscal discipline, energy security, and a tougher stance on China.

Surging Inflation and Cost of Living Pressures

Perhaps the defining issue of this election is the soaring cost of living, which has eroded household budgets and become a key point of contention between the parties.

Since Labor took office, the Reserve Bank of Australia (RBA) has raised interest rates from 0.35% in mid-2022 to a high of 4.35% by November 2023, in an effort to rein in peak inflation, which surged to 7.8%. Although the rate eased to 4.1% by early 2025, the cumulative impact of inflation on essential items—such as eggs (up 11%), beer (up 4%), and rent (up 4.8% in 2024 following 8.1% in 2023)—has left many Australians frustrated.

The Albanese government has introduced targeted relief programs, including tax cuts and energy rebates, but critics say its spending contributed to inflation staying high. The opposition, while largely supporting interest rate control measures, argues for greater fiscal restraint and has linked recent economic woes to global instability, including U.S. tariff policies under President Trump, which have disrupted trade flows and added economic uncertainty.

A Nation Struggling with Housing Shortages

Housing affordability is another flashpoint. High building costs, material shortages, and failed construction firms have driven supply constraints, pushing rents and home prices upward. Labor has pledged to build 1.2 million new homes in five years, backed by incentive schemes for developers, but early approval figures suggest the target is slipping.

To support first-time buyers, Labor has proposed reducing the required deposit from 20% to 5%, with the government guaranteeing the rest. But the opposition argues this would only inflate demand, not boost supply.

Dutton’s Coalition proposes reducing immigration to ease housing competition, and allowing citizens to use their superannuation (retirement) savings toward home deposits. The opposition also promises to make mortgage interest tax-deductible for many first-time buyers. Economists across the spectrum remain skeptical, arguing that both sides risk further inflating home prices without tackling the real issue: limited supply.

Competing Visions on Climate and Energy

While both Labor and the Coalition agree on achieving net-zero emissions by 2050, their paths diverge sharply.

Labor has set a 2030 target of cutting emissions by 43% compared to 2005 levels and plans to transition 82% of the national energy grid to renewables by the end of the decade. The plan focuses on wind, solar, and battery storage, with a phase-out of coal and gas plants.

The Coalition challenges the viability of that plan, calling it “fantasy energy policy.” Instead, they propose a bold nuclear energy plan, including seven government-funded nuclear power stations, with the first coming online in 2035. Until then, they advocate for greater use of natural gas to fill the gap. Dutton’s party has refused to set a new 2030 target, saying Labor’s goal is unachievable and discouraging investment in transitional technologies.

This climate divide reflects broader ideological tensions about Australia’s energy future, with climate advocates favoring Labor’s urgency and critics warning of grid instability and high transition costs.

Australia-China Relations at a Crossroads

Foreign policy also looms large, especially the delicate balancing act with China, Australia’s top trading partner and a major geopolitical rival.

Relations plummeted in 2020 when the previous Liberal government demanded a global inquiry into COVID-19’s origins, prompting Beijing to suspend trade ties and impose informal bans on Australian goods, costing exporters an estimated AU$20 billion ($13 billion) annually.

Following Labor’s election in 2022, ties began to thaw. Chinese Premier Li Keqiang congratulated Albanese immediately after his win, and by 2023, all trade barriers had been lifted. Albanese also met President Xi Jinping in Beijing, signaling renewed diplomacy.

Albanese’s mantra has been:

“We will cooperate where we can, disagree where we must, and engage in the national interest.”

In contrast, Dutton, a longtime China hawk, insists that a “tougher, clearer stance” is required. He accuses Labor of self-censorship to avoid offending Beijing and pledges to restore strategic assertiveness.

“Australia must be willing to criticize any nation whose behavior imperils regional stability,” he told the Lowy Institute in March.

What’s at Stake?

This election pits two fundamentally different visions for Australia’s future against each other: a Labor Party focused on clean energy, progressive spending, and international diplomacy, versus a Coalition favoring energy pragmatism, reduced immigration, fiscal conservatism, and a hawkish foreign policy.

With high inflation still fresh in voters’ minds and the economic outlook tied to global shifts, the outcome could chart a new course not only for domestic policy but also Australia’s role in the Indo-Pacific and global climate efforts.