Hike JobSeeker and you might have a deal on tax, Adam Bandt tells Labor

Greens leader Adam Bandt is considering demanding an increase to JobSeeker in exchange for his party’s support for Labor’s revamped tax cuts package.

Greens leader Adam Bandt says if stage three tax cuts are on the table, negative gearing and the capital gains tax discount should be too. Picture: NCA NewsWire / Martin Ollman

Greens leader Adam Bandt is considering demanding an increase to JobSeeker in exchange for his party’s support for Labor’s revamped tax cuts package, and says if stage three is on the table then a crackdown on negative gearing and the capital gains tax discount should be too.

In an exclusive interview with The Australian, Mr Bandt also revealed the party was considering sending Anthony Albanese’s “stage 3.1” tax cuts legislation to a parliamentary committee, which would draw out the political debate on the issue and give Peter Dutton more time to finalise a position.

The positioning from the Greens comes as the government warned the Coalition that honouring the original stage three tax cuts while retaining the lower 16 per cent tax rate for those earning between $18,200 and $45,000 would blow a $121bn hole in the budget over 10 years.

Mr Bandt said the two concessions the Greens were looking at “closely” included lifting the $18,200 tax-free income threshold – though he declined to put a number on what it should be raised to – and putting dental into Medicare.

But there were a “range of options” beyond those the Greens were looking at, such as increasing JobSeeker, which could form part of negotiations with the government.

“At this stage there’s a number of things the Greens have campaigned for for a while – including a lift to JobSeeker, getting dental into Medicare – and we’re looking at all of those now in the context of Labor’s stage 3.1,” Mr Bandt said.

“We’ll have a constructive proposal to put on the table when the legislation comes to parliament. The government may say it’s take it or leave it, but history suggests otherwise so we will push (for more support for low- and middle-income earners).

“What we want to see is legislation pass the parliament before July 1 that fundamentally fixes the unfairness and at the moment it doesn’t do that.”

If the Coalition opposes Labor’s tax cuts overhaul, the government will need to win over the Greens as well as two Senate crossbenchers to drive its package through parliament.

Mr Bandt said the Greens had already pushed Labor to “shift” on stage three and now wanted the government to shift on negative gearing and capital gains tax.

The party’s policy is to limit negative gearing to one investment property and abolish the capital gains tax discount. “If we can revisit stage three, then surely we can revisit negative gearing and capital gains tax because that is what is pushing a lot of renters and first-home buyers to the brink,” Mr Bandt said.

“A third of the country now rents, Labor has nothing for them, they’re coming to parliament with half measures that will see the problem get worse. They just don’t get how big Labor’s housing and rental crisis is. This will be the year the Greens push Labor to take it seriously.”

Jim Chalmers said earlier this week Labor wasn’t contemplating or considering resurrecting policies the party took to the 2019 election to curb negative gearing and halve the capital gains tax discount.

But the Opposition Leader said the Treasurer’s credibility in relation to taxing the family home was in question after The Australian revealed some Labor MPs wanted to look at the tax setting that was helping investors rather than first-home buyers. The government will on Thursday release Treasury costings aimed at deterring the Coalition from standing by the original plan for a 30 per cent flat tax rate from $45,000 to $200,000 while also keeping the lower 16 per cent tax rate for those earning between $18,200 and $45,000.

Many Coalition MPs backed that proposal this week, saying it would allow the opposition to maintain its commitment to the original stage three while not taking any tax cuts away from low-income earners under Labor’s plan.

The Treasury costings suggest that, if both of these changes were introduced on July 1, the cost to the budget over the forward estimates would be an extra $38.9bn while, over the decade, it would cost the budget an additional $120.9bn.

“If Peter Dutton and the Coalition go down this road they will smash the budget, blow out the deficits, rack up more debt to give to the highest income earners, and risk upward pressure on inflation,” Dr Chalmers said.