Labor could raise welfare payments for cost-of-living relief without stoking inflation, economists say

Shoppers during Boxing Day sales in Sydney in December. Households and businesses have been squeezed by 13 interest rate hikes by the RBA since May 2022. Photograph: Steven Saphore/AAP

Addressing competition issues and increasing unemployment benefits and pensions are ways the Albanese government could tackle cost-of-living pressures but they would have to be coupled with savings to avoid reigniting inflation, economists say.

The prime minister, Anthony Albanese, on Wednesday said he had asked Treasury and the finance department to develop “further propositions” for providing cost-of-living relief by the May budget.