Be bold on tax reforms, Labor told

Unions and Labor MPs are urging the government to “be bolder” in future tax reforms to make the nation’s tax system fairer and ensure more Australians are given relief.

CFMEU national secretary Zach Smith was critical of the government for being so “adamant” on honouring the stage three tax cuts.

Unions and Labor MPs are urging the government to “be bolder” in future tax reforms to make the nation’s tax system more progressive, as Anthony Albanese stares down calls from left-wing voters to wind back the controversial stage three tax cuts.

The Prime Minister said on Monday the stage three tax cuts would “assist people” during a cost-of-living crisis by putting more money in their pockets, hosing down concerns the tax cut would be inflationary.

“It’s factored in by the RBA already and factored in by Treasury and Finance,” he told the ABC.

Mr Albanese’s doubling down on the policy follows some Labor MPs pushing for the government to trim the Coalition-era tax cuts, with advocates railing against the policy that they argue hands thousands of dollars back to those on the highest incomes.

Electrical Trades Union national secretary Michael Wright said the government needed to ensure it was creating a “pro-employment” tax system going forward. “That means that those taxes that get in the way of employing people, like payroll tax, need to be reformed,” he said.

New analysis by the Coalition of the stage three tax cuts show the measure – due to come into force on July 1 – will apply to nearly 700,000 workers, triple the number of those captured above the highest threshold when it was last raised to $180,001 in 2009.

CFMEU national secretary Zach Smith was critical of the government for being so “adamant” on honouring the stage three tax cuts. “Labor must be much bolder on tax reform. The CFMEU’s plan for a mega profits tax on just 0.3 per cent of businesses would comfortably generate enough revenue to build the 750,000 homes we desperately need by 2041,” he said.

“A once-in-a-lifetime housing crisis demands ambitious policy responses. We urge the government to implement a mega profits tax to end the housing crisis.”

The CFMEU’s proposal includes a 40 per cent super profits tax that would raise the $500bn required for the 750,000 homes.

One of the leading members of Labor for Housing and a rising figure in the Socialist Left, Julijana Todorovic, said the government needed to overhaul the tax system completely and start “taxing capital, rather than taxing labour”.

“Unless we shift to that thinking, we are never going to have economic equity in this country,” she said.

“Really easy ones could be negative gearing and capital gains. Also not giving people tax concessions for having private health insurance … because we are forcing people to subsidise the private health sector, who make enormous profits.”

Tasmanian Labor MP Brian Mitchell stressed the government had been “absolutely consistent” since the election that stage three tax cuts would go ahead, but said “we should always be looking at ways to make systems fairer”.

“The bulk of the fight against inflation has been worn by mortgage holders who are already squeezed,” he said.

“I would like us to look at measures that make sure that we’re all pulling our weight, that all of us have got a shoulder to the wheel of fighting inflation.”

Fellow Tasmanian and Labor senator Helen Polley said stage three tax cuts would deliver relief to Australians who needed it but that it was clear “we need to get more creative than we have been” on how to ease pressure for those on lower incomes.

Senator Polley said she was more focused on ensuring Labor’s cost-of-living measures, which include assistance for rent and energy bills, were not just “turned off” rather than tax reforms.

Mr Albanese has confirmed the departments of Treasury and Finance are investigating further cost-of-living measures ahead of the May budget but has not yet committed to any ongoing policy.

Housing and Homelessness Minister Julie Collins said the stage three tax cuts were “about supporting Australians”, but that all options were on the table when it came to future tax reforms that would deliver relief.

“What we are saying is we took commitments to the last election … but we’re also understanding that many Australians are doing it tough, Australians right across the board,” she said.

“We want to make sure that we’re providing cost-of-living relief to Australians who need it most, but we’re obviously also very conscious of inflation and making sure we don’t make the Reserve Bank of Australia’s job any harder … We do understand Australians are doing it tough and we’re looking at all the options.”