Economists warning over Greens’ demands over tax, spending agenda

Adam Bandt’s $110bn list of demands for negotiating a minority government this federal election will cost Aussie jobs, economists have warned.

A Greens’ fantasy to raise billions of dollars by taxing billionaires and mining companies to pay for its huge spending agenda will drive away investment, cost Australian jobs and ultimately fail to raise the revenue it claims, economists have warned.

Adam Bandt’s list of demands for negotiating a minority government should Labor fall short of winning 76 seats this federal election cost more than $110bn, according to analysis produced for the party by the Parliamentary Budget Office, an eye-watering figure that could force Anthony Albanese to find more money in an already debt-laden budget in order to secure their support.

The Prime Minister has declared he will do “no deals” to form government, but in reality he would have to negotiate with the crossbench in some form if Labor does not win enough seats to govern in their own right, which is a result currently predicted by the majority of published poll.

Prime Minister Anthony Albanese, pictured on the campaign trail in Perth, has declared he will do “no deals” to form government. Picture: Jason Edwards/NewsWire

Despite Mr Albanese’s insistence he can avoid this outcome, Mr Bandt has outlined a suite of expensive policy asks he would be putting forward as contingent on his party’s support, along with a controversial plan on how to pay for them.

Big ticket items include putting dental into Medicare at a cost of $46bn over the four-year forward estimates, $55bn wiping all student debt, and imposing a cap on rent increases, which would cost the budget $8bn.

To pay for these policies and more, the Greens have proposed a “Robin Hood” tax on big corporations that would lead to $121bn being raised over the forward estimates of three years, as well as hiking up taxes on 150 Australian billionaires, raising $50bn in a decade.

The figures were produced by the independent PBO, but come with a clear caveat the modelling was subject to “uncertainties” including “behavioural responses” to each of the proposals such as leaving the country to avoid paying.

Adam Bandt’s list of demands for negotiating a minority government should Labor fall short of winning 76 seats this federal election cost more than $110bn, according to analysis produced for the party by the Parliamentary Budget Office. Picture: John Gass

Economist Warren Hogan, managing director of EQ Economics, warned the tax revenue would never materialise because the companies and billionaires would relocate overseas.

“They can just rack off,” he said. “They are mobile – they can deploy vast sums of money to avoid that tax legally.

“You actually make money by taxing everyone a little bit, not a couple of really rich people a lot. If we could have done that we would have done it a long time ago,” he said.

Economists have warned the Greens’ plan to tax billionaires and mining companies more to pay for its spending agenda could cost Aussies jobs. Picture: John Gass

Independent economist Saul Eslake said if companies went offshore it would cost Australian jobs.

“If they do this it will have a negative impact on the economy in terms of job losses,” he said.

“Multinationals employ a lot of people in sectors very important to Australia including mining, energy and finance.

“Of course if the Greens lose the revenue they will not be able to afford to put in place their other policies.”

The Greens have argued mining companies with resources in the ground in Australia would not be able to simply move offshore to avoid tax, while their policy targeting billionaires included explicit settings to prevent “capital flight”.

“Big corporations will still make a profit under the Greens’ plan, of course they’ll stay here, but they’ll just have to start paying their fair share of tax,” Mr Bandt said.

Individuals would be banned from moving any more than 10 per cent of their wealth out of the country.

Election strategist Kos Samaras, director of Redbridge, said the Greens’ policies were based on winning votes rather than any real hope that they would be enacted.

“This policy works well for their constituency of young Australians aged 18 to 34 who think taxing big corporations is a good idea. It is just about the Greens winning votes,” he said.

“But it will never happen. Labor does not want to do a deal with them and would rather rely on the Teals. It is very precariously balanced but at the moment we are looking at a Labor minority government with an excess of 70 seats that will not need to rely on the Greens.”

Originally published as Economists warning over Greens’ demands over tax, spending agenda