Low- and middle-income earners could receive additional cost-of-living relief, the Prime Minister has indicated, as federal Labor politicians return to Canberra early to decide whether to take further action.
Labor members will meet on Wednesday, weeks before Parliament is to resume, to discuss advice from the departments of the Treasury and Finance on options to relieve cost of living for families without increasing inflation.
The government has not said what measures it will consider, but experts have floated extensions to energy relief or support for food or rental expenses.
Radio station 2GB has also reported the cabinet will consider a restructure of the stage three tax cuts, but a government spokesperson responded: "The government's position hasn't changed."
Former Finance deputy secretary Stephen Bartos said relief could be offset with further reductions in government spending, pointing to infrastructure cuts in 2023 as an example.
"There actually is nothing wrong with giving the households that are doing it really tough - that is low-income households, and people on benefits - giving them additional funding," Mr Bartos said.
"Provided at the same time the government reduces other spending, in other areas."
Cuts or delays to projects, particularly in the Defence industry, could deliver this room, he said.
Anthony Albanese has spoken out early and often on cost of living in the first weeks of the year, as the government seeks to wrest back control of the narrative from the Coalition.
"What we'll be looking at, of course, is the advice that we've received, about how we can take pressure off cost of living for people who are doing it tough without putting pressure on inflation," he told Sky News on Monday morning.
"We've always said that we'll continue to look for ways to assist people.
"If we can find ways to put extra dollars in people's pockets, particularly those low- and middle-income earners who are doing it tough, then we're prepared to do so."
Relief could come in the form of extending energy bill subsidies or tax reform at the lower end of the income spectrum, associate professor at the Australian National University Ben Phillips said.
Less likely, but "sensible" would be improvements to the welfare system, and rent relief.
"It's a bit of an indicator if you're trying to give handouts all the time, whenever there's a slightest change in the economy, that there's something wrong with your welfare system," he said.
ACOSS calls for govt to scrap stage three tax cuts
The Australian Council of Social Service has called for the government to scrap the stage three tax cuts and implement a comprehensive package of relief.
"ACOSS's package calls on the federal government to lift income support to at least $78 a day, limit rent increases for people in private rentals and lower energy bills by retrofitting low-income housing, removing green subsidies from bills and writing off energy debt for people on low incomes," chief executive officer Cassandra Goldie said in a statement.
The Coalition has meanwhile hit out at Mr Albanese for the expense of calling politicians back to Canberra.
Liberal and National politicians criticised Labor heavily in 2023 for its handling of cost of living, claiming it had prioritised the failed Voice to Parliament referendum over economic relief for Australians.
"They rush everybody back to Canberra at great expense and I guess there'll be a meeting in Parliament House and there'll be a party at the Lodge," Deputy Opposition Leader Sussan Ley said on Monday.
"If you're coming to Canberra to work, come in, have the meeting and then leave to go back to your electorates, so you can stay in touch with your people, people who are genuinely hurting."
The federal government has also stepped up pressure on supermarkets over their pricing, asking the Australian Competition and Consumer Commission for advice on what further powers it requires to regulate price gouging.
This follows the appointment of former Labor MP Craig Emerson to lead a review into the grocery code of conduct, and a continuing Senate probe into supermarket pricing.
"What is not understandable for Australians at the checkout is how is it that farmers are getting less for their produce but that's not flowing through to lower prices," Mr Albanese told Sky News.
But Associate Professor Phillips called this scrutiny "more political than reality".
"We know that input prices for food and beverages have increased strongly ... so it's not surprising that they've increased their prices to match the increase in input prices.
