The Greens have ruled out supporting personal income tax cuts, with costings showing tax cuts addressing bracket creep could cost $17.6bn over 10 years.
It comes one day after the Greens ruled out supporting corporate tax cuts.
The Greens asked the Parliamentary Budget Office to cost the effect of lifting the upper threshold for the middle-income tax bracket from $80,000 to $85,000 or $90,000, in effect giving tax cuts to people on incomes over $80,000.
The Parliamentary Budget Office responded it would cost $3.8bn over four years and $17.55bn over 10 years to lift the threshold to $90,000. This would give a person earning $90,000 or more a $450 tax cut by lifting the threshold at which one pays 32.5c in a dollar tax.
The option of raising the threshold to $85,000 would cost $2bn over four years and $9.25bn over 10 years. A person earning $85,000 or more would save $225 under that scenario.
The Greens’ Treasury spokesman, Adam Bandt, said his party would not support income tax cuts in the upcoming budget, which should reduce inequality and secure the country’s revenue base.
“The treasurer has talked up the issue of ‘bracket creep’ and hasn’t ruled out income tax cuts,” he said.
“Instead of frittering away billions of dollars on $5 a week tax cuts for above average income earners, we should use that money for schools, hospitals and infrastructure.
“With slow wages growth, low inflation and government revenue problems, it’s the wrong time to focus on bracket creep.”
Instead the Greens will propose a new system of progressive personal tax rates that “will make the very wealthy pay more and raise $24bn over the next decade”, Bandt said.
Release of the costings follows signs the Coalition is favouring cutting business taxes over personal income tax breaks.
On Tuesday the Australian tax office released figures that showed of the 321 companies on the list of Australian-owned private companies with an income of $200m or more, 98 paid no tax and 123 companies paid about a third of their taxable income in tax.
Bandt said the corporate tax figures show “some companies with taxable incomes in the tens or hundreds of millions of dollars are paying no tax at all”.
He announced the Greens would not support corporate tax cuts.
“If the Liberals believe the response to companies not paying enough tax is to give them a tax cut, if they want to get that through parliament, they’re going to need the Labor party support for it,” he said.
On Tuesday the shadow treasurer, Chris Bowen, said the treasurer, Scott Morrison, had “floated this thought bubble of corporate tax cuts” in the budget but Labor would wait to see the plan before announcing its tax policy.
He said: “Any plans to reduce corporate tax have to be seen in terms of the priorities. Our priorities have been, quite rightly, education funding, higher education funding [and] schools funding.”
Bowen said some companies were not paying enough tax because they “manipulate their tax arrangements through complex transactions which aren’t available to every day Australians” and small businesses.
The leader of the Greens, Richard Di Natale, singled out Pratt Holdings, which had total revenue of $2.5bn and donated $210,000 to the Liberal party, for paying no company tax.
“We’ve got the government going after the workers in the construction industry and yet we’ve got one of the biggest companies in the construction industry in Grocon paying next to no tax,” he said.
