The Fight for the Australian Dream: Highlights from the 2nd Treasurers’ Debate

In their second debate, Treasurer Jim Chalmers and Angus Taylor debated housing, tax cuts, and energy.

Following a weekend of housing policy announcements linked to tax cuts.

At the Liberal Party campaign launch in Sydney on April 13, Opposition Leader Peter Dutton unveiled that a Coalition government would enable first home buyers of newly constructed homes to deduct their mortgage interest payments (up to $650,000) from their taxable income.

This was in addition to permitting first home buyers to access $50,000 of their super to purchase property.

On the same day, Labor in Perth introduced a $10 billion fund to construct 100,000 homes, with the government acting as a loan guarantor to reduce deposit requirements to 5 percent.

Here are the key points from the debate.

Is Australia’s Financial Situation in Dire Straits?

The debate commenced with a stark realization—Australia is facing an underlying cash deficit of $42.1 billion in 2025–26, as per the latest budget papers. Can the Treasury still afford to implement tax cuts?

Chalmers defended the government’s fiscal performance, highlighting a $177 billion decrease in gross debt this year and consecutive budget surpluses—attributed to high commodity prices beyond Australia’s control.

Taylor, in response, accused Labor of deteriorating the fiscal bottom line.

“The reality is, they’ve driven the budget to the edge. We’ve opposed over $100 billion of Labor’s expenses since they took office… and we are committed to delivering a stronger budget outcome than Labor,” he stated.

Chalmers brushed off the claim as “respectfully rubbish,” urging Australians to verify the facts in the budget documents.

Coalition’s Campaign U-Turn on Tax Cuts

After months of criticizing Labor’s spending, Dutton declared that there would be “no further tax cuts.”

However, a surprise campaign promise followed—a “significant one-time” tax refund for 10 million Australians worth $1,200, applicable to workers earning up to $144,000.

Taylor explained, “We are reinstating the fiscal rules to ensure that we grow the economy faster than expenditure, ensuring that wasteful spending is avoided, which we deem as inappropriate.”

He further added, “In the short term, we need to focus on rebuilding household buffers, which is why we are offering the $1,200 tax offset and a 25 cents per liter reduction in fuel prices.”

Chalmers countered by claiming, “What Angus hasn’t disclosed to your audience is that his policy aims to permanently legislate higher income taxes for Australians.”

During the campaign launch weekend, Labor also introduced a $1,000 instant tax deduction for work-related expenses, eliminating the need for receipts.

Housing: Who’s Really Boosting Supply?

The Coalition’s housing policy came under scrutiny for potentially increasing demand without addressing new home supply.

“What they fail to understand is that the policy we announced was specifically for new homes,” Taylor clarified. “We chose not to include existing homes… Focusing on first home buyers in that market benefits both them and boosts overall supply.”

Meanwhile, Chalmers defended Labor’s existing promise of $10 billion to construct more homes, a figure that was notably absent from the latest federal budget.