With the major parties set to use budget week as a staging post for a tax battle to play out between now and the next election, the Greens have entered the field, proposing a “Buffett rule” for high earners and a super profits tax for the mining industry.
In a policy to be unveiled on Wednesday, the Greens will seek to outbid Labor on progressivity, proposing a Buffett rule for wealthy Australians favoured by some in the ALP left but opposed by the leadership, and scrapping negative gearing for any future purchases.
The policy also contains a commitment to end fossil fuel subsidies and introduce a mining super profits tax at a rate of 40%, as well as taking action on the petroleum resource rent tax – which the government has in its sights in next week’s budget.
The resources giants expect the Coalition will use the budget to adjust the PRRT’s uplift rate, a shift that will impact deductions that gas companies can carry forward, but reports suggest that existing projects will be quarantined.
In a statement issued before Wednesday’s announcement, the Greens leader, Richard Di Natale, said: “Australia doesn’t have a tax system any more – it’s a tax avoidance system.
“Big corporations and the super-rich have rigged the rules for themselves, and the old parties are too frightened to do anything about it.”
Di Natale said unfair loopholes made it easier for high-wealth individuals, investors and speculators to build wealth “at the expense of renters, first home buyers and the money available for universal public services”.
The government has made it clear it will use next week’s budget to deliver an income tax cut for voters. This week the treasurer, Scott Morrison, has refused to guarantee that the government will run budget surpluses of at least 1% of GDP, leaving himself room open to grant larger personal income tax cuts.
Given that both sides consider next week an election budget, Labor is likely to match the government’s offering on income tax or craft an alternative.
Earlier in the week Deloitte Access Economics released a budget forecast indicating the government has room to move on delivering tax relief.
It predicted that the company tax take would be up $36.2bn since this time last year and income tax collections would be $10.6bn higher, shrinking the deficit.
