Not many people have cash anymore but if they do their wallets will be feeling a bit heavier next year.

Malcolm Turnbull nailed one effort to cut the cost of living, getting his income tax cuts through the Senate.

The next step to cut living costs is tackling power prices, but that faces tougher opposition from inside his own party.

Income tax cuts for people earning up to $90,000 will be in place from July 1, showing up in tax returns in 2019.

Turnbull got his plan through without needing Labor’s support, even though he could have split the bill if he really needed to.

In the end he didn’t have to.

The prime minister will take the tax cuts to the Super Saturday by-elections on July 28, arguing Labor wants to roll them back.

‘Of course, these competing tax policies will certainly be key issues in those by-elections,’ Turnbull told ABC radio on Friday.

Labor is asking voters to remember they’re offering bigger tax cuts – almost double – and not cutting taxes for big banks.

Bill Shorten is changing negative gearing, family trusts and dividend imputation credits to build a spending war chest to put more money into essential services and pay off debt.

He’s also not backing the longer term tax cuts in 2022 and 2024, because they flatten Australia’s progressive tax system.

The divide between the two parties is particularly clear.

‘Whether it’s at the by-elections or the general election next year, Labor will be going to that election and asking Australians to pay higher tax,’ Turnbull said.

The by-elections are more than just a test of competing tax policies.

No Australian government has won a by-election off an opposition since 1920, when the sitting MP was charged with treason for speaking at an anti-British rally.

Shorten is expected to keep Perth and Fremantle, Labor appears ahead in Longman, but Braddon is on a knife edge.

The Tasmanian electorate voted dramatically Liberal in the March state election, delivering a whopping 56 per cent primary vote compared to Labor’s 27 per cent.

If Shorten loses the first opposition by-election in 98 years, there will be some questions asked about his leadership.

At this stage of the game he’s meant to be winning seats off the government, not the other way around.

Labor’s new rules about leadership challenges make it difficult to change leaders – but there is a sneaky backdoor if MPs get desperate.

A simple majority of caucus can vote to suspend the rules, and then have a leadership spill.

Shorten won the caucus vote but lost the rank-and-file vote in 2013, and he still has many MPs in caucus personally loyal to him.

But the test will be whether that loyalty holds if Labor is going backwards rather than forwards.

Speaking of loyalty, Turnbull has his own problems with his backbench.

Tony Abbott once led the country but now he leads a grumpy set of blokes on the coalition backbench who are determined to cause trouble for Turnbull.

They see it as trying to save the government from itself, making sure Turnbull’s more ‘liberal’ ideas are reigned in.

The prime minister is trying to cut power prices after he was besieged last year when retailers and generators kept gouging households and businesses.

But the former prime minister wants to ensure that means more coal power, even if it is now more expensive to build than new renewable energy options.

Abbott argued coal is reliable – awkwardly just days after coal generators went offline in NSW and forced huge price spikes.

Turnbull is sticking to his guns, despite Abbott’s threats to vote against his own party.

‘The national energy guarantee has the strong support, the overwhelming support of the party room. But most importantly it has the strong support of the community,’ Turnbull said.

The coalition is banking on it to lower power prices, ensure reliability, cut emissions and most importantly take the heat off the cost of living debate.

When Turnbull goes to the next election, he hopes to have tax cuts in place, power prices down and voters’ wallets feeling heavier than ever before.