Greens promise major tax cuts and welfare boost funded by gas and mining profits

The Australian Greens have promised to lift the tax-free threshold to $26,000 and pay an extra $1000 a year to people on income support, funding the plan with new taxes on gas exports and mining profits worth a combined $45 billion a year.

Greens leader David Shoebridge will officially announce the policy at his first National Press Club address later on Wednesday. In an advanced abstract of the speech seen by The New Daily, Shoebridge will say that the change will mean that “the first $26,000 you earn, you pay no income tax on,” up from the current $18,200 threshold and would mean almost all working Australians would be at least $1,000 better off.

The Greens are also proposing a $1000 annual boost for pensioners, carers, students and jobseekers, so that every recipient, whether working or on income support, would receive more than $1000. That would work out to about an extra $19 a week for a person receiving Jobseeker.

According to Parliamentary Budget Office costings requested by the Greens, the package would cost around $22 billion a year.

To pay for it, Shoebridge says the Greens would impose a tax on gas exports to raise an estimated $17 billion a year, and introduce a market-linked resource rent tax on the mining sector to raise a further $28 billion, a model drawn from a new report by think tank Prosper Australia.

Prosper Australia’s report used Queensland’s progressive coal royalties as evidence such a tax does not drive away investment. The royalty program was introduced by the last Labor government and has proved so successful, the LNP has kept it in place.

“When the price of our resources goes up, the Australian people should get their fair share,” Shoebridge will say.

“After all, the public owns the resources in the first place.”

Shoebridge will also raise how little Australia collects of its petroleum in public revenue –  just 14 per cent of the value compared with 40 per cent in Norway and 42 per cent in Alaska.

Anticipating criticism that handing households extra cash would add to inflation, Shoebridge will argue corporate profits, rather than household spending, were increasingly driving price pressures.

“It’s not the mortgage holders and renters who have cut their spending to the bone and are getting smashed by the RBA who are driving inflation,” he will say.

Previous criticisms of tax cut policies is that in this current inflationary economic climate, the RBA would respond by raising interest rates. Shoebridge says that taxing resource profits would help offset any inflationary effect by “trimming those corporate profits and sharing them with everyone.”

The Coalition announced spending cuts, including to welfare and housing, to pay for its proposed tax cuts, which it says would address bracket creep. Labor has delivered its own income tax cuts across its time in government.  So far, the major parties have avoided taking up resources tax, despite strong community support.

Shoebridge believes it is the obvious answer.

We can structure a Commonwealth tax that responds to rising commodity prices so that when the booms happen, a fair share of the cream is captured by the public, not just a handful of already superwealthy shareholders,” he will say in his speech.

“…Right now, those windfall profits get scooped up by the ultra-wealthy. It’s time we secured a fair return on the resources that belong to all Australians. Because right now, Australians are being ripped off on a grand scale.”

Shoebridge will deliver his first address to the press club in the wake of the alleged attack on Helen Haines and increased calls for ‘civility’ from parliamentarians. It will also be his first major media appearance since Greens senator Jordon Steele-John was accused of inappropriate behaviour, allegations which are being investigated by the WA branch of the party.