Federal Budget 2025 - Opposition Reply

CONTRIBUTOR

Dutton’s Budget Reply draws the election battle lines in a surprising way

Consistent with his peculiar reference to the 1998 cult rom-com, Opposition Leader Peter Dutton’s reply to the 2025-26 Federal Budget (the Budget) unequivocally illustrates that Australia is indeed at its ‘sliding doors moment’, with the Coalition’s policies heading into the May 3 federal election in diametric contrast to those of the Government.

Drawing the battle lines for the next five weeks, Dutton confirmed that income tax cuts will be absent from the Coalition’s election platform, with a temporary 12-month halving of fuel excise – at a cost of $6 billion - in lieu thereof. Other significant measures announced during Dutton’s 30-minute reply speech include a:

Bold and arguably antithetical ‘Australian gas for Australians’ scheme not dissimilar to Western’s Australia (WA) Domestic Gas Policy, which would reserve gas for domestic use on Australia’s east coast and drive down wholesale domestic gas prices by around 30%;
Plan to axe a whopping 41,000 federal public servants, forecast to save $10 billion over the forward estimates period;
Cut to permanent migration by 25%, which he says will “restore the greater Australian dream of home ownership”; and
$9 billion investment in health, which despite a lack of detail edges the $8.5 billion boost to Medicare that constituted the centrepiece of the Budget.

It wasn’t all bad news for the gas industry, though, with Dutton also announcing plans to invest $1 billion in a Critical Gas Infrastructure Fund to increase gas pipeline and storage capacity, to fast-track a decision on WA’s North West Shelf project, and more generally “halve approval times”.

Earlier in the day, the Coalition reiterated its commitment to a permanent $30,000 instant asset write off, which is in contradiction to the Budget’s silence on whether the current temporary $20,000 threshold would be extended beyond 30 June 2025.

Pledging to cut Federal government expenditure as Australia’s debt levels hurtle toward the eye-watering level of $1.2 trillion, Dutton confirmed that the Coalition will, if elected, abolish the:

$16 billion Critical Minerals and Hydrogen Production Tax Incentives that received Royal Assent less than a fortnight ago;
Government’s off-budget $20 billion Rewiring the National Fund, which is designed to connect major renewable energy projects to deliver affordable and reliable renewable energy; and
$10 billion Housing Australia Future Fund, under which he said, “not a single additional new home has been built”.

Dutton also alluded to measures to guarantee minimum funding levels for health, education and essential services, develop ‘asymmetric’ defence capabilities, and deliver safer communities, although no relevant detail was provided.

Strong on gas and petrol, but less so on income tax cuts and renewable energy, Dutton’s reply to the Budget evinces a stark polarity between the respective policies of the Coalition and the Government. Although those who were hoping to see solutions to the cost of living crisis proffered may have been left disappointed by the Dutton’s reply, the battles line have now unequivocally been drawn.