“Means test it all, why not?” Lambie wants childcare and EV subsidies tied to income, and gas exporters taxed, as Labor needs her vote

Jacqui Lambie has handed Treasurer Jim Chalmers a savings list he did not ask for: means-test the childcare subsidy, means-test the support for electric cars, and tax gas exporters.

The independent Tasmanian senator made the case on national television on Sunday morning, saying Australia has “got to target better”. She said she had not seen her constituents under such financial strain since the COVID-19 pandemic and expected the hardship to last a couple more years.

Why now?

Because the government is looking for money. Mr Chalmers is under growing pressure to rein in spending before the mid-year budget update in December, with inflation still stubborn and the Reserve Bank having lifted the cash rate to 4.85% on 3 November, its fifth rise this year and the highest level since 2008. Some economists and bank chiefs have argued that government spending is adding to price pressure; Mr Chalmers has said public demand has eased.

What would means-testing change?

For childcare, less than the slogan suggests. The Child Care Subsidy is already tied to family income: since July 2023 it has started at 90% of the fee for lower-income families and tapered away as income rises, cutting out only for households earning more than about $530,000 a year. Labor has also scrapped the activity test, guaranteeing families three days of subsidised care a week whatever their work hours. Lambie’s example of a $500,000 couple points at the top of that scale, where support is already small.

Electric cars are a different story. The main federal support is not a rebate at the dealership but an exemption from fringe benefits tax for electric cars provided through salary packaging, including novated leases. That benefit grows with the buyer’s tax rate, so it is worth most to higher earners. A means test there would bite.

Where does she stand on gas?

Labor’s gas reservation bill would require liquefied natural gas exporters to keep up to 20% of their product for the domestic market. A Senate committee majority has recommended it pass, but the Coalition and the Greens both dissented, and the government needs one of them, or enough of the crossbench, to get it through.

Lambie says she will vote for it. But she also wants the government to find the “courage” for a 20% tax on gas exports. The Greens and independent senator David Pocock are pushing a 25% export tax, which they say would raise billions of dollars a year.

The government has rejected an export tax again and again, pointing to trade relationships with Asian customers and to the petroleum resource rent tax already in place. Resources Minister Madeleine King argues reservation is the better tool because a modest oversupply at home would push prices down. Shadow Defence Minister James Paterson said the Coalition was worried about future investment in gas, but did not say how it would vote.

What does it mean for households?

For most families using childcare, nothing changes unless the government acts, and it has given no sign it will means-test further. For buyers weighing an electric car through a novated lease, the tax break is the policy most exposed if Labor takes Lambie’s advice. And on gas, the vote this week decides whether more of Australia’s gas stays here, which the government says will lower prices for homes and manufacturers.