Melbourne, Mar 28 (AP) Australians will go to the polls on May 3 for general elections with high costs of living and a shortage of housing likely weighing against the government as Prime Minister Anthony Albanese's centre-left Labour Party seeks a second three-year term.

The elections will be 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 parties are starkly divided on how to wean the nation off fossil fuel-generated electricity.

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

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Here's what you need to know about the main issues:

Surging inflation

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.

Egg prices surged 11 per cent last year and beer rose 4 per cent, according to government figures.

Australian rents rose 4.8 per cent last year after a 8.1 per cent spike in 2023, property analyst CoreLogic said.

The central bank's benchmark cash rate rose from a record low 0.1 per cent to 0.35 per cent two weeks before Albanese's center-left Labour Party came to power at elections in May 2022.

The rate rose a dozen times since then, peaking at 4.35 per cent in November 2023. Inflation peaked that year at 7.8 per cent.

The central bank reduced the cash rate by a quarter percentage point in February to 4.1 per cent in an indication that the worst the cost of living crisis had passed.

Scarce and expensive housing

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

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.

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

The opposition 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.

Different paths to net zero

Both parties agree on the goal: to achieve net zero emissions by 2050.

The opposition has promised to build seven government-funded nuclear power plants across Australia, the first providing electricity in 2035.

The government argues Australia's existing coal and gas-fired generators won't last long enough to meet the nation's needs until nuclear power arrives. It plans to have 82 per cent of Australia's energy grid powered by renewables by 2030.

The opposition argues the government's policy of replacing coal and gas with renewable energy sources including wind turbines and solar cells is unachievable, and would reduce investment in clean energy technologies.

The government was elected in 2022 with a promise to reduce Australia's greenhouse gas emissions by 43 per cent below 2005 levels by the end of the decade and achieve net zero by 2050.

The opposition won't set a new target for 2030 before the election but retains a commitment to net-zero by 2050 with nuclear power.

Ties with China

Trade and diplomatic relations between Australia and China plumbed new depths in 2020 after the previous conservative Australian government demanded an international inquiry into the origins of and responses to the Covid-19 pandemic.

Beijing barred minister-to-minister contacts with Australia and imposed a series of official and unofficial bans on commodities including coal, wine, barley, wood and lobsters that cost Australian exporters up to 20 billion Australian dollars (USD 13 billion) a year.

The thaw started almost immediately with the election of the centre-left Labour Party in 2022. Chinese Premier Li Keqiang wrote to congratulate Prime Minister Albanese on his election victory within days.

All the trade barriers were gradually lifted and Albanese met President Xi Jinping during a state visit to Beijing in 2023.

Albanese often says about China: “We will cooperate where we can, disagree where we must and engage in the national interest.”

Opposition leader Peter Dutton, a longtime critic of China, has said bilateral relations would improve even further with a tough and uncompromising approach.

He has accused Albanese of self-censorship to avoid offending Beijing.

“Australia must be willing to criticize any nation whose behavior imperils stability in the region, and that's what a coalition government I lead will do confidently and in concert with like-minded countries,” Dutton told the Lowy Institute international policy think-tank in Sydney this month. (AP)

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