Climate, housing programs would be axed under Coalition’s plan to save $31b

The Coalition has announced ambitious plans to create $31 billion in budget savings following months of criticism over the federal government’s spending habits.

Opposition Leader Angus Taylor and shadow treasurer Tim Wilson on Monday said savings from abolishing housing, industry and climate policies would fund its income tax cuts and leave the budget $22 billion better off over four years.

“The problem with Labor is it loves throwing money around, and we don’t have the money to throw around right now because taxpayers are having to pay too much already,” Taylor told reporters in Canberra.

“We need to we need to take the pressure off.”

About $9.4 billion of savings would come from scrapping the Net Zero Economy Agency, $7.3 billion from corporate “handouts” and the National Reconstruction Fund and $4.7 billion from the Help to Buy Scheme, Housing Australia Future Fund, New Homes Bonus and Build to Rent.

Another $7.9 billion would come from the slashing the tobacco excise and $2 billion from changes to welfare and NDIS eligibility.

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Labor passed cuts to the NDIS that would save $37.8 billion by the end of the decade in August.

The Coalition has repeatedly blamed the government for its spending habits, claiming it has caused above-target inflation and, therefore, interest rate hikes.

In the 2025-26 financial year, spending was the highest share of the economy outside the pandemic since 1986-87 at 26.9 per cent. The budget recorded a deficit of $22.2 billion.

Prime Minister Anthony Albanese has defended his government’s spending, saying that spending growth is less than half the 30-year average under his leadership.

“We have produced the first back-to-back surpluses in almost two decades. And importantly, when it comes to savings, we have improved the budget bottom line by $230 billion compared to what we inherited,” he said on Monday.

Albanese added that the government is continuing to find savings where it can with work already underway to find more ahead of MYEFO and next year’s budget.

Treasurer Jim Chalmers, who has been intensely criticised for the persistently above-target inflation, has pointed the finger at the war in Iran and defended his record.

“The Reserve Bank’s got its job to do. It will do that free of interference from me,” he told The Sydney Morning Herald’s Inside Politics podcast on Monday.

“I’ve got my own job to do: managing the budget responsibly, rolling out this cost-of-living relief via the tax system and in other ways. Those are my responsibilities, and I’m focused on them.

“The Reserve Bank and the government have got the same objectives here, price stability and full employment.”

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Reserve Bank of Australia chief economist Sarah Hunter told Nine’s 60 Minutes on Sunday that state and federal government spending has contributed to demand which, along with global oil shocks, has pushed up prices across the economy.

“Government spending is definitely part of the picture,” she said.

Monthly inflation rose to 4 per cent in the 12 months to August, with new figures to be released this week.

Inflation has remained persistently high despite four rate rises this year pushing it up to 4.6 per cent, which is adding pressure on households that are being pushed closer to mortgage stress.

Roy Morgan research has found the 32.3 per cent of mortgage holders are at risk of mortgage stress, up by 8.4 per cent since January.

There are fears of another rate hike at the Reserve Bank meeting in November after the deputy governor, Andrew Hauser, said the inflation outlook is “materially worse” than what was previously projected.

Wilson said the Coalition’s proposed cuts would take inflation pressure off households but could not say how much inflation would lower under the plan.

A spokesperson for the Housing Minister Clare O’Neil criticised the Coalition’s plan to make cuts to housing policies in the midst of a housing crisis.

“What’s on the chopping block? Programs building tens of thousands of social and affordable homes, helping people on low and middle incomes buy their first home, and supporting 80,000 new rental homes,” the spokesperson told nine.com.au.

“Angus Taylor needs to explain how cutting money from housing will get a single extra home built, make renting more affordable or help anyone buy their first home.

“You cannot fix a housing shortage by cutting the programs that help build homes. Australians need more homes, and Angus Taylor is promising less support to build them.”