Albanese Government: 3 Immediate Steps to Ease Cost of Living 2026

The Albanese government is under pressure to address the cost of living crisis, with consumer sentiment at recession-like levels despite real GDP growth of 2% over the year to June. As global shocks and domestic challenges mount, what immediate steps can the government take to make Australians feel better off?

In the 1976 film Network, news anchor Howard Beale famously urged viewers to yell, “I’m as mad as hell, and I’m not going to take this any more!” That sentiment resonates today in Australia and across the world. In October, consumer sentiment at home fell to levels more often associated with recessions, despite the fact that the latest GDP numbers show the economy grew by a real 2% over the year to June (that is, 2% over and above the rate of inflation).

But there are plenty of reasons why Australians are unhappy, and even angry. The combination of war-induced energy shocks, rising tariffs, ageing populations, increased military spending, more frequent climate shocks, and even the datacentre frenzy are all pushing up inflation and public sector debt, which in turn have led to rising interest rates. These are not short-term trends.

Add to that falling house prices, rising unemployment, rising inequality, and a general malaise around what AI might or might not do, and you might wonder why sentiment isn’t even lower. Sadly, in Australia and across the world, pessimism is turning to rising frustration, anger, and even violence. In the wake of the appalling alleged attack on the independent MP Helen Haines this week, there have been calls to “lower the temperature”.

Which begs the question: what might the federal government reasonably do to make people feel better off? Here are three immediate steps the Albanese government could take.

1. Targeted Cost-of-Living Relief

The government could introduce targeted cost-of-living relief measures, such as expanding energy bill relief or increasing rent assistance. These measures would directly address the financial pressures many Australians face and could be implemented quickly.

For instance, extending the Energy Bill Relief Fund to more households and small businesses would help offset rising energy costs. Similarly, boosting Commonwealth Rent Assistance would ease the burden on renters facing soaring rents.

Such targeted support is more effective than broad-based stimulus, which could fuel inflation further. By focusing on those most in need, the government can provide immediate relief without overheating the economy.

2. Enhance Competition and Reduce Red Tape

The government could take steps to enhance competition in key sectors and reduce unnecessary red tape, which would lower prices for consumers and boost productivity. For example, streamlining approval processes for housing construction could increase supply and address affordability.

Additionally, promoting competition in the grocery sector could lead to lower prices at the checkout. The government could also review tariffs and regulations that unnecessarily increase costs for businesses, which are passed on to consumers.

These measures would not only provide immediate relief but also contribute to long-term economic efficiency. By reducing regulatory burdens, the government can stimulate investment and job creation.

3. Communicate a Clear Economic Plan

The government could improve its communication of a clear economic plan to restore confidence. Uncertainty about the future can exacerbate negative sentiment; a coherent strategy with measurable milestones would help.

For instance, outlining a credible path to budget repair and explaining how policies will address inflation and growth could reassure households and businesses. Regular updates on progress would build trust.

Moreover, the government could engage more directly with communities to explain its policies and listen to concerns. This two-way communication would help “lower the temperature” and foster a sense of shared purpose.

Key Takeaways

• Consumer sentiment is at recession-like levels despite positive GDP growth, creating political pressure.
• Targeted cost-of-living relief, such as energy bill rebates and rent assistance, can provide immediate support.
• Enhancing competition and reducing red tape can lower prices and boost productivity.
• Clear communication of an economic plan is essential to restore confidence.

Comparing the Options

Each option has trade-offs, but together they could form a comprehensive approach to improving sentiment and addressing underlying issues.

The Political Context

The Albanese government’s response to these challenges will shape the political landscape. With an election due by 2025, the government is under pressure to deliver tangible results. The opposition has seized on cost-of-living concerns, arguing that government policies are exacerbating inflation.

Meanwhile, the rise of far-right parties in Europe, such as in Sweden, where the far-right eyes a role in government, serves as a warning of what can happen when mainstream parties fail to address economic grievances. In Australia, the government must demonstrate it is on the side of ordinary people.

As we have seen in Sweden, the far-right has capitalized on discontent. The Albanese government would do well to heed that lesson. For a deeper look at how far-right parties are gaining ground, see our analysis of the Sweden general election and the far-right’s role in government.

Another relevant example is the upcoming Sweden election 2026, where the far-right eyes a first government role. These developments underscore the importance of addressing economic insecurity to maintain political stability. The background to this story is set out in Woolworths Profit Surge Amid Cost-of-Living Crisis. A related thread runs through Cost of Living Australia: Rate Rise Sparks Household Crisis.

In Australia, the government’s handling of the cost of living will be crucial. It must also navigate other contentious issues, such as the smart glasses ban in public offices announced by Albanese, which has sparked debate about privacy and security. Balancing these concerns while delivering economic relief is a tough task. Earlier coverage in Cost of Living Crisis: Burnham's VAT Cut on Electricity shows how the argument developed. A closer look at the same subject appears in Student Commuters Rise: Cost of Living at Home vs Halls.

Ultimately, the government’s ability to communicate and deliver on these measures will determine whether Australians feel better off. As the saying goes, actions speak louder than words. Anyone following the wider picture can start with Australia Union Boss Warns Pauline Hanson on Cost of Living.