Australia: Federal elections set to see Labour Party continue in power for second term

Some 18 million citizens are expected to head to the polls across Australia on 03 May 2025 to vote in the 2025 federal election, as Prime Minister and Labour Party leader Anthony Albanese seeks a second term in office. This comes after the Prime Minister called for an election in late March, seeking an extension of his mandate. Polls show the Labour Party leading the Liberal–National Coalition (LNP) led by Peter Dutton.

Main Contenders and Key Issues

The election is mainly between the two major parties: the Labour Party and the Liberal-National coalition. The Labour Party, the ruling party, won a majority at the last federal election in 2022. The Australian Greens, Australia’s third-largest political party, is led by Adam Bandt. The upcoming election campaign has been dominated by cost-of-living issues, healthcare, home ownership and geopolitical uncertainty, mainly driven by recent U.S. foreign policies.

Under Albanese, the government implemented a string of policies that it says are aimed at providing relief, such as keeping the cost of medications down and offering tax cuts, energy rebates and rental assistance to those eligible. However, Australia has raised interest rates 12 times since May 2022. Additionally, buying or renting a home has become unaffordable for the average Australian due to increasing house prices, rental increases and a lack of social housing. The country’s healthcare system is now struggling due to staff shortages and soaring costs.

Labour has promised $10 billion in funding to build 100,000 properties specifically for first-home buyers, while the Coalition pledges to ban foreign investors from buying existing homes for two years. Labour announced a "modest" tax cut worth about $5 a week when it's introduced in 2026-27 before doubling to $10 a week the year after. The Coalition also promised to repeal Labour's tax cuts, instead promising to halve the fuel excise for a year to provide cost-of-living relief to motorists. It has also offered up a temporary tax offset of up to $1200 for low- and middle-income earners who take home less than $144,000. This will only apply for the 2025-26 financial year. Regarding healthcare, Labour said it will push for an $8.5 billion Medicare boost to significantly increase bulk billing rates and reduce the cost of medicines listed on the Pharmaceutical Benefits Scheme (PBS) from $31.60 to $25. The coalition promised to back the $8.5 billion Medicare funding and cut PBS medicine costs.

On the geopolitical front, the next Australian government will have to face the U.S. President Donald Trump administration’s tariffs, which include a minimum 10% tariff on almost all imports and 25% tariffs on specific products, including aluminium and steel.

Australia’s parliament and voting system:

In Australia, voting is compulsory, and either party will need 76 seats of the 150-member lower house to keep control. Elections will also be held to fill 40 of the country’s 76 Senate seats. To form a majority government in the 2025 election, a party or coalition needs 76 seats out of 150. There are two houses of parliament, with the government formed by the party or coalition holding a majority in the lower chamber, the House of Representatives. The upper house, the Senate, has 76 members – 12 from each of the six states and two from the Australian Capital Territory and the Northern Territory, Australia's two less-populous territories. Half of the Senate seats will be contested in this election. Currently, Labour holds 77 House of Representatives seats, the Liberal-National coalition holds 53 seats, the Greens hold 4, and 15 are held by micro parties and independents.

In Australia, a term only lasting three years. Prime ministers are chosen by the governing party from the House. They generally serve the full length of their three-year term unless they lose the majority of the House or are replaced as the leader of their party. There is no fixed number of terms a person can serve as prime minister. Australia uses a preferential voting system, where candidates are ranked in order of preference. If no candidate wins more than 50% of the vote in the first tally, the votes from the least popular candidates are redistributed, and that process is repeated until someone secures a majority.

Once polls close, ballot counting will begin. The Australian Electoral Commission (AEC) never publishes the final results on the night of the elections; however, tallies typically start appearing and may indicate the result much sooner.

Forecast:

Australian elections are typically peaceful, and the transfer of power has been historically peaceful, but there remains a potential for minor civil unrest. The Labour Party is tipped to win the elections, and Anthony Albanese is likely to continue in his role as prime minister for a second term.