Greens offer Government new tax deal – February 2016
The Greens have offered to begin negotiations with the Government on possible tax options after Prime Minister Malcolm Turnbull ruled out any changes in the GST.
The Greens offered to begin negotiations with the Government on a range of tax options which they have previously had costed by the Parliamentary Budget Office and which the Government, since ruling out GST changes, has said it would consider.
The Greens have previously struck deals with the Coalition on the debt ceiling, multinational tax avoidance and pension reform in this term of parliament, proving they could work constructively with Mr Morrison, and raising the ire of the Labor Party.
The Greens suggested the tax changes could be included in this year’s Budget.
They have been calling for a “progressive” approach to superannuation taxes for more than two years, since having their policy costed by the Parliamentary Budget Office, which found it could generate $3 billion a year.
The proposal would replace the existing tax on super contributions — a flat 15 per cent for all workers — with a rate that is scaled according to income, so that the person pays 15 percentage points less than his or her marginal income tax rate.
This is close to a plan closely examined by Mr Turnbull when it was proposed by Deloitte Access Economics director Chris Richardson last year. An alternative, to scale back the cap on tax-free superannuation contributions, has also been suggested.
The Greens are also proposing to remove negative gearing on all new properties, raising $4 billion a year, but the government has said the tax break benefits many ordinary workers. Mr Bandt signalled that the Greens were open to a discussion on this and other changes.
While the Greens also want a tougher approach to capital gains tax to raise $10.2 billion over four years, as well as cuts to diesel fuel rebates for the mining industry to raise $19.5 billion over four years, these are not seen as deal-breakers to the talks on negative gearing or super.
The government has sent mixed signals on negative gearing, but Mr Morrison did not rule out applying limits on its use, although he strongly supports the benefits it offers to ordinary workers.
Mr Morrison told parliament he would discuss the minor party's proposals but rejected the idea of boosting spending. “I hear plenty of suggestions about how extra money should be spent,” he said.
“But only those on this side of the House have been seriously considering ideas and suggestions about how you can actually ease and reduce the burden on Australians who are earning.”
Labor Leader Bill Shorten warned about the consequences of any deal between the Greens and the Government. “The last time the Greens worked with the Liberals on tax we saw some large companies still able to shroud their tax affairs in secrecy,” he said.
“Remember, the Greens did a dirty deal with the Liberals and increased the threshold before which Australians could see what companies are doing in the payment of their tax.
“So I'm very concerned, not that the Greens are working with the Liberals, but what they're actually going to come up with, and so far it's led to a diminution in the transparency of the tax arrangements of large Australian companies.
Greens leader Richard Di Natale said he understood the government was sympathetic to the idea. However, the discussion should not be guided by Mr Morrison's desire “simply to hand (the revenue) over to other people” in the form of income tax cuts.
“The choice is whether we continue to cut Medicare, take money out of hospitals, out of schools ... they're the sort of things that we should be investing in and for us the tax reform debate is an opportunity to do that,” he said.