Albanese concedes savings needed as he faces internal Labor pressure on cost-of-living crisis
Summary
Australian Prime Minister Anthony Albanese said the government is seeking budget savings but will not make major cuts to health, education or essential services. The comments came as inflation rose and expectations grew that the Reserve Bank of Australia could raise interest rates again, adding pressure on household budgets and the government.Key Facts
- Australia’s headline inflation rate reached 4.3%.
- The Reserve Bank of Australia’s cash rate stood at 4.6% after four rate increases in 2026.
- Markets and Labor MPs expected the Reserve Bank could raise rates again the following week.
- Albanese said the government would look for savings ahead of its mid-December budget update.
- The government proposed reducing the private health insurance rebate for people aged over 65, which it said would save about A$3 billion over four years for aged care.
- The Coalition opposed the proposed rebate change.
- Transport costs rose 8.7% over the previous year, food prices rose 3.2%, and housing costs increased 5.2%.
- Former industry minister Ed Husic called for price caps on essential groceries, including bread, milk, meat and fresh produce.
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