What’s the Coalition’s plan?

By the Editorial Team · Monday, November 2, 2026

The Coalition has introduced a $31 billion plan to cut government spending on programs like climate initiatives, subsidies, and housing over the next four years to reduce inflationary pressures. However, experts question the plan's effectiveness, noting that some measures, such as the large tobacco tax cut and costly income tax threshold adjustments, may undermine budget savings and potentially worsen fiscal deficits.

The Coalition has unveiled a $31 billion savings plan aimed at curbing what it describes as excessive government spending over the next four years. The proposal, announced on Monday, targets a range of programs, including climate initiatives, subsidies, and housing measures, as part of efforts to reduce inflationary pressures.

The plan involves dismantling what the Coalition calls “Labor’s climate bureaucracy,” which includes ending financial support for home batteries and electric vehicles. Additionally, the party intends to eliminate various public subsidies for sectors such as critical minerals and restrict access to the National Disability Insurance Scheme (NDIS) for non-citizens.

One of the more controversial elements of the package is the proposed 80% reduction in tobacco taxes. The Coalition argues this cut would generate $7.9 billion over four years by encouraging smokers to transition back to the legal cigarette market. However, critics, including independent analysts, have expressed skepticism. Bartos, an economic commentator, called the tobacco tax cut “incredibly unlikely” to succeed in drawing consumers away from the black market. He also noted that while certain spending cuts, such as abolishing the Net Zero Authority, might produce savings, these would be marginal compared to anticipated increases in the NDIS and health budgets. "It would make some difference, but it wouldn’t make a big enough difference to combat inflation," he said.

In addition to expenditure reductions, the Coalition has promised to introduce an automatic annual adjustment of income tax thresholds tied to inflation, a policy dubbed the “tax-back guarantee.” Initially, the government estimated this adjustment would cost $22.5 billion over four years. More recent and detailed assessments, however, suggest the expense could reach $35 billion within the same period, with the potential to escalate to $44 billion in a single year within the next decade. These revised figures imply that the policy could contribute to larger budget deficits and potentially increase inflationary pressure, contrary to the Coalition’s stated goals.

The debate underscores the complexities policymakers face in balancing fiscal restraint with economic growth and inflation control. The efficacy of the Coalition’s plan remains uncertain, with experts divided over whether the proposed savings and tax changes will effectively address inflation without exacerbating fiscal deficits.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.