Unrealised gains tax ‘in play’ as Greens leader Larissa Waters unveils policy aims

Labor’s controversial tax on unrealised capital gains is on track to gain the approval of the Greens, setting up a test for Jim Chalmers over whether to run with the left-wing party’s support or listen to those warning him to dump the proposal.

Greens leader Larissa Waters in Brisbane on Tuesday. Picture: Dan Peled / NewsWire

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Labor’s controversial tax on unrealised capital gains is on track to gain the approval of the Greens, setting up a test for Jim Chalmers over whether to run with the left-wing party’s support or listen to the ALP elders, business leaders and economists warning him to dump the proposal.

With the Senate vote count all but settled, and the Greens to have a balance-of-power veto over Anthony Albanese’s second-term agenda, new leader Larissa Waters has declared she sees “no difficulties” with the unrealised gains tax plan despite the Greens having held up the proposal before Labor’s election landslide.

While the Greens are yet to formalise their position for the next term of parliament, and Senator Waters saying she still wants to see Labor cut the UCGT threshold for superannuation balances from $3m to $2m, she offered her first signal that she ultimately believed her party would support changes to unrealised gains.

“We put our suggestions to government, and that was that we thought the threshold should be lower than $3m because that only captures half a per cent of people, and we thought a $2m threshold … would raise more revenue and would be a fairer approach. And we’re still of that view,” Senator Waters told The Australian on Tuesday.

“We haven’t met again as a partyroom to discuss that particular issue. And we’ll obviously wait to see what the government puts forward … and continue those discussions. I’m hopeful that we can see a good outcome there. In the broader sense, we don’t have difficulty with that concept (of taxing unrealised capital gains). It’s what the government has proposed. We’re prepared to consider it.”

Treasurer Jim Chalmers. Picture: NewsWire / Martin Ollman

Former Greens leader Adam Bandt. Picture: AAP

The Australian understands Labor intends to use the Greens’ depleted power to pass an unrealised capital gains tax on superannuation accounts worth more than $3m without any indexation.

Some of Australia’s most prominent business people have spoken out against the idea, including Wesfarmers chief executive Rob Scott and CSL chairman Brian McNamee, while Labor luminaries including Paul Keating and Bill Kelty have let their dislike of the Labor policy be known.

Former superannuation association boss Michael Easson and the father of renewable energy infrastructure in Australia, Mike Fitzpatrick, have also hit out against the idea, and former Reserve Bank governor Philip Lowe and Treasury secretary Ken Henry added to the chorus of voices last week calling for Labor to drop the unrealised gains tax but increase the rate on concessions and contributions.

Dr Chalmers insists the party is not budging but is open to discussions with Greens. “We’ll see who we engage with. We’ve got a bit of time. They’ll have a view. They know our policy. But those conversations haven’t begun,” he said last week.

Senator Waters’ comments on the UCGT come as she navigates how to use her party’s Senate balance of power to push the Albanese government further to the left, while dealing with the failure of her party to hold on to House of Representatives seats – including that of predecessor Adam Bandt – and recognising why voters abandoned the Greens for Labor.

The new Greens leader, in a wide-ranging interview, signalled she would focus on the environment and equality, while making clear she considered the likely ­extension of Woodside Energy’s North West Shelf gas project as the first test of the Prime Minister.

Senator Waters said she would “genuinely consider” what the Greens could have done differently through an election review.

“I don’t have the answers to that yet, but I have an open mind to get that feedback and to consider what that will mean for us going forward,” she said.

“I can’t say ‘no, we didn’t do anything wrong’, but I can say we’re going to have a look to see whether there are things we could have done differently, and we’ll take that on board for future.

“I want to make sure that we all always have an eye to how can we help people and how can we protect the planet? And I think people want us to, like politicians generally, to stop just taking potshots at each other.”

Senator Waters said she expected the loss of Greens MPs Stephen Bates and Max Chandler-Mather from the Queensland seats of Brisbane and Griffith would soon be felt by the community.

“I think people will start to feel the loss of Stephen and Max. People will start to experience that loss,” she said.

As a former environmental lawyer and the Greens’ women’s spokesman for about 10 years, Senator Waters said her “personal inclinations” and focus were in the climate and gender equity space.

That follows questions being raised over whether the Greens’ outspoken stance on Palestine contributed to the party’s loss of lower house seats, which Senator Waters rejected.

“We can talk about more than one thing at once,” she said.

“Yes, of course, we formed originally out of the environment and climate movement and, yes, that’s in our DNA. But we’ve always tackled inequality. We’ve always been concerned about global peace. We have held those values since our inception.

Environment Minister Murray Watt. Picture: NewsWire / Martin Ollman

“I do think that people expect a serious and modern political party, a mature political party, to have a perspective on all of those issues … I think our offering is right for the time.”

The Greens would also continue to seek to add dental care to Medicare, address the housing crisis, wipe more student debt and make childcare free, Senator Waters said.

“Those are things that I think there could be some genuinely positive outcomes come out of this parliament,” she said.

The first piece of legislation Labor expects to pass with the support of the Greens will wipe 20 per cent off student debt, with the minor party expected to push for the government to go further throughout the parliamentary term.

The Queensland senator also threw down the gauntlet for Labor to work with the Greens, rather than the Coalition, on nature positive laws, which were spiked after the Western Australian government raised concerns with the bill.

“One of the early tests I think, for the government on climate and environment will be this approval (on the North West Shelf), which is due to be made by Saturday,” she said.

“If Minister (Murray) Watt ticks off on that massive carbon bomb to extend out fossil fuel usage to 2070, then that will send a strong message about what he really thinks about protecting the environment and the climate, and I think will really shape our sense of how serious they are about fixing those environmental laws.”

Senator Waters pointed out that if the government worked with the Coalition it would probably be pushed to overhaul the nuclear energy ban, which is part of the Environment Protection and Biodiversity Conservation Act. Nuclear energy remains deeply divisive within the Coalition, with some inner-city Liberals seeing it as a “vote killer” while others in the Liberal and National parties have pushed Opposition Leader Sussan Ley to keep nuclear energy as a policy within the Coalition agreement.

Similar to Mr Albanese’s modest reshuffle, Senator Waters indicated that she would keep a high degree of continuity when it came to the roles she offered her colleagues.

“Mehreen (Faruqi) continues on as our deputy, totally, and Sarah (Hanson-Young) continues on as our manager of parliamentary business, and Nick (McKim) continues on as our whip. Penny (Allman-Payne) continues on as our primary chair, and she’s our deputy whip in the chamber,” she said.

“That answers (the) question about continuity, I think that’s probably the proof in the pudding there.”

On Dorinda Cox’s unsuccessful run for deputy leader, Senator Waters said the partyroom had ultimately decided to stick with a similar leadership team.

“I think that the folk who were doing the roles that they’d been doing for the last three years … had all shown that they were really great in those roles, and Dorinda (Cox) has shown that she’s excellent in her portfolio areas as well,” Senator Waters said.

“And so my partyroom took the decision to … essentially stick with the continuity of the team.”