The Hidden Cuts in Labor vs Coalition Plans
Labor and the Coalition have big promises — but what’s being cut, what’s missing, and what it means for your life?
Both major parties say they’re being responsible with money - but take very different paths.
Labor keeps most services running and avoids big cuts, while the Coalition promises deeper savings but shrinks public services.
The fine print reveals things they don’t talk about much - from housing cuts to hidden freezes in foreign aid.
Every time an election rolls around, politicians tell us they're managing the economy responsibly.
They throw around numbers in the billions and talk about "fiscal repair" and "cost-of-living relief." But for most people, whether you're working, studying, raising a family, running a small business, or just trying to keep your head above water, what you want to know is simple:
Where is the money going, what’s being cut, and how does it affect my life?
This article breaks down the budget promises from both Labor and the Coalition in the 2025 election. We’ll keep it plain, practical, and focused on what really matters to you.
What Both Parties Are Promising
Labor’s Plan:
A small improvement to the national budget (about $1 billion better than forecast).
Keeps most services running and doesn’t make big new cuts.
Offers cheaper medicines, energy rebates, and income tax cuts.
Focuses on renewables and upgrading the electricity grid.
Keeps government strong to deliver services and reduce reliance on consultants.
Coalition’s Plan:
A bigger improvement to the budget (about $13.9 billion saved).
Plans to shrink the size of government by cutting 41,000 public service jobs.
Offers a $1,200 tax offset and slashes the fuel excise for a year (saving up to $1,500 for some families).
Promises to invest heavily in nuclear power and support more gas energy.
Offers more tax perks for small businesses and entrepreneurs.
So, Who’s Cutting What?
Some cuts are clear. Others are hidden in the fine print - in things like “indexation freezes” or quietly shutting down programs.
Here’s what’s being scaled back or cut:
Coalition Cuts (Direct and Hidden):
41,000 public service jobs gone over five years (not front-line roles like teachers or nurses, but the back-end roles that process applications, manage programs, or give support).
Foreign aid funding is frozen for many countries outside our region - meaning over $800 million less in real terms.
Big clean energy programs are scrapped - like hydrogen support, aluminium industry credits, and the agency that helps guide us to net zero emissions.
Housing support is cut - including the “Help to Buy” scheme and key housing infrastructure programs.
Education and training take a hit - with Fee-Free TAFE scaled back and some programs for students and early childhood workers defunded.
Local roads and community grants are cancelled or not renewed.
Labor Cuts (More Modest):
Cuts about $6.4 billion in public service spending, mostly by reducing consultants, travel, legal bills, and office costs.
Increases student visa application fees, except for applicants from the Pacific and Timor-Leste.
What Does This Mean for You?
If you’re a worker or looking for a job:
Labor is focused on keeping public service jobs and stable support programs.
The Coalition wants to shrink government and shift more responsibility to the private sector. This might affect how quickly things like job services, business approvals, or support programs are delivered.
If you’re a small business owner:
Labor offers a stable environment - not many big changes, no new tax breaks.
The Coalition offers bigger write-offs and new tax breaks to help businesses grow or invest in equipment. You may feel the difference in short-term support.
If you’re paying rent or trying to buy:
Labor continues social and affordable housing programs.
The Coalition offers a new tax deduction for first-home buyers’ mortgage interest - but cuts several government housing initiatives.
If you’re thinking about energy costs:
Labor continues to support renewables, battery storage, and grid upgrades.
The Coalition plans to build nuclear power plants starting in the 2030s - a long-term bet that could change the direction of Australia’s energy mix.
If you care about global aid and diplomacy:
Labor keeps our aid settings steady.
The Coalition quietly freezes aid growth in many regions outside the Pacific - which could affect Australia’s standing overseas or limit international development work.
What’s Not Being Talked About
This is important: Neither party is talking much about what happens after 2029.
They both avoid the big, hard conversation about long-term tax reform.
They don’t explain how we’ll keep funding the NDIS, aged care, defence spending, or health services as our population grows and ages.
And they don’t say how they’ll make our economy fair and sustainable in the 2030s - when the global landscape is likely to be very different.
That’s not necessarily dishonest - it’s political. But it leaves voters and businesses without a full roadmap.
The Big Picture
If you want certainty, stability, and continued services, Labor is offering that.
If you want faster savings, tax breaks, and a smaller government, the Coalition is heading that way - but some services may slow down or shrink along the way.
There’s no perfect plan. Both have trade-offs. What matters is understanding the real choices behind the numbers:
What’s funded?
What’s frozen or cut?
And who picks up the slack?
Whether you’re running a household, a business, or just trying to make a plan for the future, this stuff matters.
How this article was made
This article was written using public policy costings released by the Australian Labor Party (Labor's Costed Plan to Build Australia's Future) and the Liberal Party of Australia (Our Plan for a Sustainable Budget), both published ahead of the 2025 federal election. To ensure clarity and fairness, the content was analysed and summarised using OpenAI’s ChatGPT-4o, which compared the documents line-by-line and identified both explicit and hidden fiscal changes. The aim was to make complex economic information understandable and relevant to everyday Australians - whether you're a voter, worker, or business owner trying to make sense of what these policies really mean.