Tax reform starts at the top
The Greens are the only party that understands that the economy must work for the benefit of society and not the other way around. We have a progressive plan where tax reform starts at the top by removing unfair tax breaks and wasteful subsidies for polluting industries. Not only will this help address the structural deficit of the budget, but it will force money away from tax sheltered locations like superannuation, housing and mining and into productive areas that will set us up for the new economy and more equitable wealth distribution
The Greens have put a costed plan on the table to raise billions of dollars in revenue to fund our schools, hospitals, services and infrastructure by ending unfair tax breaks that benefit the very wealthy.
Our plan will fairly tax superannuation, end negative gearing and the Capital Gains Tax discount and stop giving billions of dollars to the likes of Gina Rinehart to buy cheaper diesel will bring in $38 billion of revenue over the next four years – much needed funding for schools, hospitals, public transport and support for those who need it most.
Negative gearing & capital gains tax
The biggest winners from negative gearing are the nation’s highest income earners. Over half of individual taxpayers with negatively geared rental housing investments are in the top 10% of personal taxpayers, with 30% earning over $500,000. The tax benefit of negative gearing is 10 times more for the highest income earners than for the lowest.
Meanwhile, income earned from sale of assets like property or shares is 50% tax-free while income earned in wages and savings is fully taxed. There is no reason for your hard earned wages to be taxed at the full rate but for investment income to be 50% tax-free. Nearly three quarters of the benefits of this concession go to the top 10% of income-earning households.
We propose to deliver billions in budget savings from reform of negative gearing and the capital gains tax discount, that should be used, in part, for new affordable housing for thousands of families and individuals stranded on social housing waiting lists and experiencing homelessness.
Ending tax avoidance
Only the Greens have ruled out supporting company and income tax cuts this election, and now we have prepared the most comprehensive response to tax avoidance ever announced in Australia.
This policy will raise at least $1.69 billion additional revenue to spend on essential services and infrastructure. As these tax integrity measures begin to bite we will see an uptake in corporate tax payments made in Australia which will improve the budget bottom line over time.
The Greens measures are aimed at four key areas to combat the scourge of tax avoidance across enforcement, tax law changes, enhanced public disclosure and global diplomacy.
The Buffett Rule
The Greens' plan for a high income tax guarantee is a safeguard of our progressive income tax system and ensures that the system is working properly, that tax is being paid by those who can most afford it. Our plan limits the deductions that the top 1% of income earners can claim and will raise $7.3 billion over the forward estimates.
While there are many technical reforms our super system needs, the most pressing, simple option is to remove the current flat tax rate of 15 percent for everyone, and replace it with a progressive system based closely on the individual employee’s marginal tax rate.
As a supporting priority measure, the policy also clamps down on ‘churning’ wages through super funds. While the $30,000 contributions cap will remain, it will no longer be possible for over 55s to get a tax benefit just for putting their salary into their super while drawing an equivalent wage out the other side of their fund. The concessional tax rate will only apply to net contributions (the amount deposits exceed withdrawals).
The Greens’ statement of economic principles represents a coherent, progressive and responsible approach to economic management, contrasting very favourably with the shambles of the past three years under the Abbott-Turnbull government.
- Raise the revenue we need so that everyone can get world-class public health care, education & services and so we can grow the new economy
- Increase GDP, by growing the new, clean economy
- Get money moving from unproductive areas, like unfair tax breaks, fossil fuel subsidies, and put it to work to build the new economy.
- Grow the new economy and restore revenue before returning to surplus
- Bring forward budgets that promote sustainability, wellbeing and reduce inequality