Theme 02 — Cost of Living

Source: https://budget.gov.au/content/02-cost-of-living.htm

Cost-of-living relief sits at the centre of the 2026–27 Budget. The package combines tax cuts (Theme 04), fuel relief (Theme 01), housing assistance, healthcare subsidies, and wage support to soften the inflation shock.

Hierarchy

02 Cost of Living
├── 2.1  Tax relief (cross-ref Theme 04)
│   ├── WATO ($250 from 2027-28)
│   ├── Bracket cuts (15% then 14%)
│   └── $1,000 instant deduction
├── 2.2  Fuel & energy
│   ├── Excise cut (3 months, $2.9B)
│   ├── HV road-user charge → zero
│   └── ACCC fuel-price oversight
├── 2.3  Housing assistance
│   ├── $2B Local Infrastructure Fund (65,000 homes)
│   ├── Commonwealth Rent Assistance (back-to-back uplifts)
│   └── $59.4M youth homelessness (4,000+ young people)
├── 2.4  Healthcare
│   ├── $5.9B new PBS listings
│   ├── $1.8B + $580.2M/yr Medicare Urgent Care Clinics (137 clinics)
│   └── $25B additional hospital funding (record $220.3B / 5 years)
└── 2.5  Wages
    ├── Junior pay phase-out (retail, fast food, pharmacy)
    └── Fuel adjustment orders for transport workers

2.1 Tax relief

Full detail in Theme 04 — Tax Reform. Net annual benefit for a worker on average earnings ($81,245) by 2027–28: up to $2,816.

2.2 Fuel and energy

• Fuel excise cut from 52.6 → 20.6 c/L for 3 months from 1 April 2026 — total $2.9B.
• Heavy vehicle road-user charge cut to zero for 3 months.
• ACCC directed to weekly fuel price reporting; max competition penalties raised to $100 million.

2.3 Housing assistance

Local Infrastructure Fund — $2 billion

• Pays for water, power, sewerage and roads to unlock greenfield housing.
• Expected to support up to 65,000 homes over the decade.

Commonwealth Rent Assistance

• Currently supports >1.4 million renters.
• First back-to-back increases in more than 30 years, totalling >$20/week for a single person on the maximum rate (2023 + 2024 uplifts).

Youth homelessness — $59.4 million

• Targeted at people aged 16–24 at risk of homelessness.
• Will house >4,000 young people.

2.4 Healthcare

2.5 Wages

• Junior pay phase-out for workers aged 18–20 in retail, fast food and pharmacy (Fair Work Commission decision).
• Fuel-price adjustment orders for transport workers, effective 21 April 2026.