The Greens say the Government must use the Treasurer's upcoming Roundtable to shift our economy to better help mothers re-enter the workforce, offering in-principle support for co-operation on a wide variety of reforms, and set the agenda for Parliament's first year.
Building upon successful co-operation at Labor's last economic summit, the Greens would like this Roundtable to canvas ending property speculation incentives that let rich investors pay only half the tax of workers, to make it easier for primary carers/mothers to get back into the workforce, drive investment in clean industries, and boost income supports.
The Greens attended the 2022 Jobs and Skills Summit, with Senator Barbara Pocock and Adam Bandt MP winning the push for a series of successful reforms. These include the Right to Disconnect, the preservation of the Better Off Overall Test, and criminalising superannuation wage theft. The party is now in a stronger Senate position, as Labor only needs the Greens to pass legislation.
The Greens will engage constructively and thoughtfully for the Economic Reform Roundtable - offering suggestions with heart that tax big corporations to help people, reduce the cost of living, and to address the climate crisis.
The Greens' three priority areas for Roundtable reform:
Support for women, new parents to re-enter the workforce
Our current tax system means a second parent, usually a mum,works additional days for virtually no take home pay, and entrenches financial disadvantage that follows women for a lifetime.
Instead, we should remove the financial barriers that stop mothers of young children re-entering the workforce. Effective marginal tax rates cause sharp reductions in take home pay from an extra day of work through increased tax and student debt repayments combined with a loss in family tax benefits, childcare support and other measures.
The roundtable should be looking at removing these financial hurdles for families by providing personal tax cuts that target young parents, addressing the interaction of family tax benefits, income and childcare subsidy, and boosting income supports above the poverty line to help parents find work and look after their kids.
Tax reforms to help the housing crisis
Investors currently pay only half the taxes on capital gains including profits from flipping homes as workers pay on income, giving Clive Palmer and Gina Rinehart a tax break over a nurse or carpenter. Likewise negative gearing makes it easier for someone to acquire their 15th home than buy their first. The intersection of these two tax perks has turbocharged housing inequality.
We should stop handing billions to wealthy property investors via the Capital Gains Tax discount. This tax break cost $22.7 billion last financial year in forgone revenue and encourages treating housing as a speculative investment, not a home.
Helping green energy, not fossil fuels
Climate pollution hasn't come down for five years, and fossil fuel subsidies and a broken gas tax are part of the reason.
By using the tax system to level the playing field - taking away fossil fuel subsidies like fuel tax credits, reforming the broken coal and gas export taxation regimes and taxing their super profits, and instead encouraging investment in clean alternatives.
These priority areas have multiple policy solutions and we are not prescriptive about the means of addressing them. Our suggestions are offered in the spirit of constructive and thoughtful reform, which saw significant industrial relations wins secured between the Greens and Labor in the last term.
Significant tax reform will be a prerequisite for the Treasurer's stated intention to reduce personal taxes. Mr Chalmers has reportedly talked down changes to the GST, which opens up CGT as a primary target for change, both to increase productivity and economic fairness. The CGT Discount is diverting money away from productive investments and towards speculating on the value of existing homes. This does nothing to improve society. Australia's housing crisis is at the core of our productivity problem. The good news is it can be fixed by thoughtful changes to our tax settings.
As stated by Greens Leader Larissa Waters:
"Mums and parents who want to get back to work should be encouraged to do that, not smashed by tax so hard they're essentially working for free," Senator Waters said.
"When a second parent goes back into the workforce, they can face an effective marginal tax rate of up to 80% - which punishes mothers for wanting to go back to work and perpetuates gender based economic disadvantage which haunts mothers for life.
"Right now, the government gives better tax incentives to investors like Clive Palmer or Gina Rinehart than it does to people who actually work for a living. Whether you're a nurse or a sparkie, you contribute more to this country than a billionaire who's gotten rich off selling someone else's work - and the Greens want public money to help you, not them.
"There is no reason that a 36 year old nurse who goes back to work after her first child should pay 80 cents in effective tax for every dollar she earns in an extra day at a hospital, while someone like Clive Palmer only pays an effective tax rate of 23 cents on the dollar for the income on his capital gains.
"The government needs to use this opportunity to reshape our tax system. I want to see public money helping mums return to the workforce, not spending $12.8 billion a year handing tax discounts out to the richest 10% or $10.8 billion to encourage corporations to burn fossil fuels.
"Rather than a high level talkfest that goes nowhere, this must be an opportunity to put real solutions on the table that help people's lives. The Greens want this Summit to be remembered as the moment that federal representatives backed mums returning to work , not property speculators and fossil fuel companies - and delivered some real wins for people.
"On housing, we know that there is so much more that the government needs to do in this term - and we won't stop pushing for an end to negative gearing and unlimited rent increases. Getting changes to CGT discounts would demonstrate the government's willingness to fight for renters and first homebuyers, not rich property investors.
"Tax reform is tough, particularly when there are countless rich lobby groups yelling at government to have their needs considered first. The Greens want to see people put first, with changes that help families, aspiring first homeowners, people in poverty, and the climate; and we'll sit down with government to make that happen."
