Greens promise tax cuts for all - but not the resource sector

New Greens leader David Shoebridge will attempt to end weeks of questions over the party’s governance and culture by unveiling plans to deliver a $1000 tax cut to almost every working person while boosting support to welfare recipients.

In his first address to the National Press Club since becoming leader in September, Shoebridge will release a costed policy that would be paid for by new taxes on the “windfall profits” of gas and mining companies worth a combined $45 billion.

Shoebridge took over as leader two weeks before this masthead revealed that he had received a letter from seven active Greens members demanding an independent investigation into allegations that WA senator Jordan Steele-John had made inappropriate comments to women.

Shoebridge has ordered an independent inquiry into the allegations with Steele-John taking personal leave from parliament, which has meant he is missing this week’s Senate estimates hearings.

On Wednesday, Shoebridge will seek to shift the public debate by arguing for the tax-free threshold to be increased from $18,200 to $26,000. It would be the first change to the threshold since 2012-13 when it was increased as part of introduction of the carbon tax.

According to Shoebridge, the threshold increase would deliver a tax cut of about $1000 for almost all workers.

The Greens would also lift by $1000 welfare payments including the age pension, carers and those on JobSeeker.

Shoebridge will argue the package, worth $22 billion a year, would not add to the inflation pressures that look set to prompt the Reserve Bank to lift official interest rates to their highest level since 2008 at its meeting next week.

He will say the richest “1 per cent and their spinners” want people to ignore the key driver of inflation which is “the surge in corporate profits flooding” the economy.

“Putting $1000 in people’s pockets only adds to inflation if we don’t also do something about corporate profiteering. So we’ll take the heat out of the economy by trimming those corporate profits and sharing them with everyone,” he will argue.

“We’ll tackle the cost of living by ending this raw deal on our resources and handing the money back to the people who need it. This is how government is meant to work.”

Costing the policy for the Greens, the independent Parliamentary Budget Office said the policy would cost $65.1 billion over the next 4 years and a combined $234.6 billion over the next decade.

It would also add $57.7 billion to the interest bill on total government debt by the mid-2030s.

The tax cuts are larger than those on offer from the government, which is reducing the bottom tax rate to 14 per cent by the middle of next year while creating the $250 “working age tax offset” from July 1. It would also be worth more in the short term than the Coalition’s plan to index the bottom two tax thresholds in line with inflation from 2028-29 and then all thresholds from 2031.

This week, Treasurer Jim Chalmers said the government was looking to provide further tax cuts but it would depend on the state of the budget.

Shoebridge will say that to offset the cost of the tax cut, the Greens want a substantial increase in taxes on the resources sector.

He will argue a 25 per cent gas export tax – a proposal rejected by the federal government in the run-up to this year’s budget – would raise $17 billion a year. An extra $28 billion a year could be raised by adopting a proposal from Prosper, the left-wing think tank, for an overhaul of resource rent taxes.

The resources sector has pushed back hard against plans for higher taxation, arguing they will kill new projects and hurt job opportunities in regional areas.

The government, instead of a gas export tax, has adopted a gas reservation policy despite criticism from the industry.

Shoebridge said changes to coal royalties in Queensland since 2022, similar to what Prosper had proposed, had not scared off businesses and raised extra revenue for the state budget.

“When the price of our resources goes up, the Australian people should get their fair share; after all, the public owns the resources in the first place. Right now, those windfall profits get scooped up by the ultra-wealthy,” he will say.

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.