Leading unions pressure government to bolster taxes and reform negative gearing in major blow to Anthony Albanese's productivity agenda

Sky News AU

2 days ago

The Australian Council of Trade Unions has urged the government to make mammoth changes to numerous policies that would raise $25 billion per year in new taxes as Anthony Albanese's productivity agenda comes under threat.
The government has come under fire in recent weeks for touting new taxes ahead of it's highly anticipated economic reform roundtable in late August, with the Coalition warning that fresh levies were not the right approach to lift the nations productivity slump.
It was reported on Thursday that Treasurer Jim Chalmers was eyeing lifting the effective tax rate on Australia's 500 largest companies and reducing it for small businesses after the Productivity Commission proposed a new cashflow tax that would boost investment by up to $7.4 billion.
The PC recommended the government cut the company tax rate for businesses with revenues under $1 billion while imposing a new 5 per cent net cashflow tax for all companies depending on how much they invest.
It also called for a 20 per cent tax rate on profits for companies with annual revenues of up of to $1 billion.
However, ACTU secretary Sally McManus urged the government to go a step further and make major reforms to negative gearing and capital gains tax and to further slap increased tax rates on family trusts and resources to alleviate the country's productivity woes.
Ms McManus, who leads 38 unions, and 1.8 million workers said the government needed to pursue 'fair' redistribution of national wealth and that slashing regulation and red tape was not the answer.
'You can't address living standards without addressing housing affordability, so we are going to bring to the roundtable proposals that negative gearing and capital gains tax discounts and benefits should be limited to one investment property,' Ms McManus told The Australian.
'There should be attention paid to making sure that productivity gains are fairly distributed, just as much as we focus on an increasing the rate of productivity growth,'
Representatives from the ACTU have received four of 24 invitations to the upcoming economic reform roundtable, with Ms McManus set to have a front row seat to productivity deliberations.
She poured cold water on the Productivity Commission's claim that workers would score an estimated $14,000 a year if higher productivity expectations were met within the next decade and insisted that productivity gains needed to be shared equally.
If negative gearing and the capital gains tax discount were limited to one property then this would generate $1.5 billion in savings and earnings.
Ms McManus said the ACTU's proposal would exempt existing properties from being impacted by the new laws for five years.
She also said on the ABC's Insiders program that the government needed to "bite the bullet' and that since 2019 'the problem has just got worse.'
Nearly half of all Australian landlords had negatively geared properties according to Treasury's annual report released in December.
She said that the government should no longer subsidise the ownership of numerous investment properties and that capital needed to flow throughout the economy and workforce equitably.
The ACTU is also advocating for a significant shake-up of the resource and mining sector, including replacing the current petroleum resource rent tax with a 25 per cent export levy on revenues made from liquefied natural gas.
Australia exported $65.2 billion in LNG in the 2024-25 financial year, and if applied a 25 per cent export levy would have collected $16.3 billion in tax as opposed to the $2 billion in revenue generated from the PRRT over the same period.
The policy proposals will spark the ire of the housing and resources sector, who have not secured a spot at the upcoming roundtable.
The ACTU will also implore the government to hike taxes for billionaires and family trusts with Ms McManus adding that the current taxation system needed a seismic overhaul centred on redistribution.
'We need to raise more revenue because if we want a living standards really good quality health system and education system and the NDIS, then you've got to make sure that you've got money to pay for it,' she said.
If applied, the ACTU's tax proposals would generate $25 billion per year in fresh taxes, almost halving the governments forecasted deficits.