Greens to push Labor on wealth, super and big business tax hike
The minor party plans to go after “excessive profits” if it gains a powerful position after the federal election.
Financial Review
Jan 20, 2025
The Greens will push Labor to slug big business with higher taxes, introduce a wealth tax on the richest Australians, and broaden its proposed superannuation earnings levy to include people with $2 million in retirement savings in a hung parliament.
The minor party looks poised to play a pivotal role after the next federal election if, as polls show, the Albanese government returns to power but fails to secure a majority in the lower house.
Labor trailed the Coalition by 49 per cent to 51 per cent on a two-party-preferred basis, according to the latest The Australian Financial Review/Freshwater Strategy poll. If repeated on election day, it would send Labor into minority government.
The Greens Treasury spokesman Nick McKim said the party’s economic policy priorities in the balance of power would be making big companies pay their fair share of tax and stopping corporate price gouging, with higher revenues funnelled into initiatives such as free dental care and wiping student debt.
Greens Treasury spokesman Nick McKim. Alex Ellinghausen
Taken together, the party’s proposals would drastically increase the size of the federal government, significantly increasing both the tax take and government spending.
“We believe that not only are big corporations not paying their fair share of tax, but certain wealthy people are also not paying their fair share of tax,” Senator McKim said in an interview with The Australian Financial Review.
“Wealth is distributed in a highly unfair way in Australia, and it is the poorest Australians who are paying the price for that.”
In the event of a hung parliament, Labor would probably prioritise negotiating with the Greens, given it already needs to get the minor party on board to pass legislation through the Senate, where the Greens have 11 senators.
The Greens’ primary vote fell to 13 per cent from 14 per cent in the latest AFR/Freshwater poll. If there was a uniform swing on election day, the minor party would lose one of its four lower house seats.
Labor has been forced to negotiate with the Greens on several of its signature policies during the current term, delaying the passage of some of the Albanese government’s key pieces of legislation on housing and the environment.
In each instance, the Greens have failed to secure their major policy demand, such as a national rent freeze or ending new fossil fuel projects, but the party was often able to secure concessions, such as more money for social housing.
Slugging big business
The Greens have proposed a 40 per cent “excessive profits” tax, which would apply to all companies with more than $100 million in turnover such as the supermarkets and the big banks, in addition to higher taxes on fossil fuel companies.
The Parliamentary Budget Office estimated in August the excessive profits tax, which would apply to big businesses with a return on equity of more than 5 percentage points above the long-term bond rate, would raise $65 billion in its first four years and $296 billion over a decade.
The PBO warned the projected revenue from the tax was inherently uncertain, in part because big businesses would probably restructure to reduce their exposure to the new levy. Australia’s 30 per cent statutory corporate tax rate already is the second-highest in the OECD behind Colombia.
Senator McKim said the Greens would also push to significantly increase taxes on the fossil fuels sector.
The party has proposed toughening the Petroleum Resource Rent Tax, in a move the PBO estimates would raise $33 billion in its first four years, and implementing a 40 per cent super-profits tax on the mining sector, which would raise $23 billion by 2028.
“Taken together, that’s about $400 billion in extra revenue over the next decade, which we would use to do things like putting dental and mental health into Medicare, free GP visits, a rent freeze and wiping student debt,” Senator McKim said.
Rich Listers to pay more
Senator McKim confirmed the Greens would take a wealth tax to the next election, but declined to outline the parameters.
“We will not be raising the tax burden on middle-income Australians,” Senator McKim said.
The party’s previous policy was to levy a 6 per cent annual tax on the net wealth of Australian billionaires, which the PBO estimated in 2023 could raise $50 billion in just four years.
However, the budget watchdog warned at the time there was a litany of practical issues that meant the tax would be difficult to administer and unlikely to collect as much revenue as expected.
“It is likely that high net wealth individuals would employ strategies to avoid or minimise their wealth tax liability, which would significantly reduce the revenue raised by the tax,” the PBO said.
The PBO said there would be practical challenges valuing assets, which wealthy Australians could take advantage of by restructuring their portfolios. Rich Listers could also respond with legal action, which would significantly delay revenue collection.
“In addition, there is a risk that high wealth individuals who are liable for large amounts of tax, but hold illiquid assets, may have difficulties in paying the amount of tax owed,
Forum
Pages: 1
Greens To Push Labor On Wealth Tax Hike (Read 154 times)
