Greens demand tougher tax changes but support likely
The controversial tax changes in the budget are a “step in the right direction” but the Greens want the government to go further before pledging support.
The progressive minority party’s vote is vital to Labor’s hopes of passing the legislation in the Senate, given that the coalition has pledged to repeal changes to tax breaks for investors if elected.
While the government faces a significant backlash from small business owners and landlords over changes to capital gains tax relief and unfavorable practices, Greens economic spokesman Nick McKim said Labor had not gone far enough.
“Faced with a once-in-a-generation opportunity to shift more of the tax burden to super-rich people, and particularly super-rich property speculators, Labor has blinkered,” he told ABC Radio on Friday.
The changes were “a step in the right direction”, but Senator McKim said the Greens would oppose the government over its decision to reinstate tax changes for existing property investors, which in effect “lifted the drawbridge” on young people.
“We would take a lot more back from super-rich property investors and put that into a real tax cut for working Australians that will help them at this moment when they are being crushed as prices are rising everywhere,” he said.
Business groups have called on the government not to rush the tax package through parliament, with legislation on capital gains tax and negative amendments expected to be introduced in the next two-week session, which starts on Monday.
The proposal to scrap the 50 per cent capital gains deduction and instead index a tax and cost base of a minimum of 30 per cent has been criticized by the start-up sector, which has warned that entrepreneurs will flee the country in search of a more favorable tax regime.
Opposition Leader Angus Taylor said taxes were “toxic” and the government was pushing for a way out.
The government has been consulting with industry on a potential rollout since the budget was prepared, but Prime Minister Anthony Albanese has ruled out any significant changes to the tax changes.
Deputy Minister for Digital Economy and former tech businessman Andrew Charlton agreed that the startup sector had a point.
“If you have a really low capital base, this new regime doesn’t engage well because you don’t have anything to inflate,” he told Nine’s Today programme.
“So there are real concerns.”
According to Nine newspaper, the government is more open to changing the proposal to impose a 30 percent tax on testamentary foundations. This sparked a campaign branding it a “death tax”.
Chartered Accountants ANZ policy manager Geraldine Magarey said discretionary testamentary trusts were used by some wealthy families to divide money through wills, while also providing asset protection, flexibility and control over how wealth was transferred.
“These are often used by families with significant assets such as property, investment or small business wealth, and are particularly valuable where there are children, vulnerable beneficiaries or a desire to manage wealth across generations,” he said.
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