Australia's left-of-center government hurriedly pushed through new tax cuts in the early hours of Thursday, sparking speculation about a possible upcoming election. The tax reduction measures, unveiled in the Labor government's budget on Tuesday, will amount to approximately A$17 billion. Despite opposition from the center-right Liberal-National Coalition, both houses of parliament approved the tax cuts. The opposition described the cuts as a deceptive move. Prime Minister Anthony Albanese is rumored to possibly announce an election as soon as Friday, with potential voting dates set for May 3 or May 10. Elections must be held by May 17, following a customary five-week campaign period.

Responding to the budget, the opposition leader, Peter Dutton, announced plans to cut Australia's fuel excise by half for a year, costing about A$6 billion. The opposition intends to reverse the Labor government's tax reductions if it succeeds in the election, setting the stage for a campaign centered on divergent approaches to alleviate the electorate's cost-of-living burdens. Dutton will outline his economic strategy for Australia in his complete budget response on Thursday evening.

As Albanese faces challenges in persuading voters that the cost-of-living crisis is abating, opinion polls show the Labor party neck and neck with the opposition. The government emphasizes reduced inflation and the Reserve Bank's first interest rate decrease in four years to support its stance. The core feature of Treasurer Jim Chalmers' budget package was phased tax relief scheduled for implementation in 2026 and 2027. This includes lowering the lowest tax bracket to 15% next year and further down to 14% the following year.