What are the major issues in Australia’s election Saturday?

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MEBOURNE, Australia (AP) — Australians vote Saturday in general elections being dominated by the soaring cost of living, the economy, energy and China.

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Affordable housing is in short supply, interest rates remain high and the major political parties are starkly divided on how to wean the nation off fossil fuel-generated electricity.

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The major parties also differ on how to deal with China, which is both Australia’s largest trading partner and its greatest strategic threat.

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Here’s what to know about the main issues:

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Surging inflation

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Australians have endured one of the sharpest rises in the cost of living in recent history and the current government has been at the helm through the worst of it.

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Prices of eggs surged 11% last year and beer rose 4%, according to government figures. Average rents rose 4.8% last year after a 8.1% spike in 2023, property analyst CoreLogic said.

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The central bank’s benchmark interest rate rose from a record low 0.1% to 0.35% two weeks before Prime Minister Anthony Albanese’s center-left Labor Party came to power in 2022’s elections.

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The rate has been raised a dozen times since then, peaking at 4.35% in November 2023. Annual inflation peaked that year at 7.8%.

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The central bank reduced the inflation rate by a quarter percentage point in February to 4.1% in an indication that the worst of the cost of living crisis had passed. The rate is widely expected to be cut again at the bank’s next board meeting on May 20 due to international economic uncertainty generated by U.S. President Donald Trump’s tariffs policies.

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Scarce and expensive housing

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Inflation has put some builders out of business, exacerbating a shortage of housing, which in turn has inflated rents.

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The government has provided tax cuts and assistance for some rent and energy bills, but critics argue government spending has contributed to maintaining elevated inflation.

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Albanese promised in 2023 to build 1.2 million homes through incentives over five years starting in the middle of last year, an ambitious target in a country of 27 million people. Early building approval figures suggest his government would miss that target.

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Labor has vowed to reduce the deposit first time home buyers will be required to pay from 20% to 5% with the government becoming guarantor for the difference.

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The conservative opposition Liberal Party has promised to reduce competition for housing by reducing immigration. It’s also promised to allow Australians to spend money held in their compulsory workplace pension funds, known as superannuation, on down payments to buy a home.