Federal leader of the Greens Adam Bandt has outlined his party’s plans to clamp down on “excessive profit” from big corporations that don’t pay tax, with a new policy that could add an extra $514 billion to the federal budget.
Speaking at the National Press Club on Wednesday, Bandt outlined the policy that the Greens will bring to the next federal election, which would target big corporations like Coles and Woolies, Telstra, and the big four banks.
The general aim of the proposed policies is to tax big corporations by as much as 40 per cent, so that their gigantic profits can be used to benefit everyday Aussies by putting dental into Medicare, and providing cost-of-living relief.
If that sounds a lot like stealing from the rich and giving to the poor, you’d be right. That’s why the policy is called the Greens’ Robin Hood Reforms — which is objectively the coolest policy name I’ve heard.
But before everyone starts cheering like Adam Bandt’s Merry Men — what are the details of the Greens’ radical new economic policy, and how likely is it to pass in Parliament?
What are the Greens’ plans to tax big corporations?
In the lead-up to Australia’s next election, Bandt said his party was preparing for the “biggest campaign in Greens history”.
And big campaigns require big policies, which is why Bandt presented a three-pronged approach to tax Australia’s richest companies like they’ve never been taxed before.
Big corporations are making billions in profits, driving up prices, while millions struggle to get by, and not paying nearly enough tax.
— Adam Bandt (@AdamBandt) August 27, 2024
It’s time they pay up.
The Greens’ three proposed corporate taxes
The first move is for a 40 per cent tax to be applied to companies with an annual profit of more than $100 million. The party estimated this could add an extra $65 billion to the Commonwealth in just four years.
The second prong of the policy is to close loopholes in the existing petroleum resource rent tax (PRRT) that would make another $33 billion over the first four years.
And finally, the Greens would also add a super-profit tax of 40 per cent to coal and mining companies, which could make $27 billion in its first four years as well.
1 in 3 big corporations pay no tax.
— Adam Bandt (@AdamBandt) August 27, 2024
2 in 3 coal & gas corporations pay no tax.
That means a nurse pays more tax than 33 gas companies & 21 coal companies combined.
If passed into legislation, these three big corporation taxes are estimated by the Greens to make a whopping total of $514 billion in 10 years.
What would the government do with the extra $514 billion?
In his address to the National Press Club and on his social media pages, Adam Bandt promised that the massive amount of extra money made from these taxes would return to the pockets of the people who need it.
“By taking on the big corporations, we’ll be able to pay for things that everyone needs,” he wrote on X (formerly Twitter).
“We’ll be able to get dental into Medicare for all, so you don’t have to go broke to fix your teeth.”
Despite the seemingly populist nature of promising to make the government pay for a service that all Australians would benefit from, the policy is at no shortage of critics.
Federal Treasurer Richard Marles slammed the policy as unrealistic, saying: “Economic policy is far from the Greens’ strong suit. They have the luxury as a party that has never governed, and never will, to say whatever they like.”
Naturally, even just the proposal of such a progressive policy has got big business leaders triggered, with some writing off the plan as “economic sabotage, destructive, naïve and a frontal assault on our financial system”.
But how accurate is that?
Are super-profit taxes “economic sabotage”?
Senior economist at the Australia Institute, Matt Grudnoff explained that there are “no economic reasons” why a policy like this shouldn’t occur.
“Economically speaking, super-profit taxes are actually a really good form of tax because they don’t change behaviour at all, and super-profits only exist because a company is able to exploit its market power,” Grudnoff told PEDESTRIAN.TV.
“Economists love super-profit taxes.”
Grudnoff highlighted that any company that would be impacted by a super-profit tax can undoubtedly afford it, because when your profits are that high, even a 40 per cent tax still means you are making super-profits.
The economist also pointed out that the big corporations being targeted by the Greens’ policy are ones that have no real competition, thanks to being monopolies or duopolies. Some of the companies specifically mentioned by the party include the big four banks, Wesfarmers, Coles and Woolworths, JB Hi-Fi, Telstra, and Ampol.
As for why those companies are against the policy being passed into law… Well it doesn’t take an expert to figure out that these companies just want more money — but I’ll let the expert explain it anyway.
“Firms earning super profits are almost exclusively big, dominant firms who have a lot of power, and that includes political power. So they’re absolutely going to go out there and shout from the rooftops that this is bad and will cause massive collapse,” said Grudnoff.
“They don’t want it to come in — they want to convince the rest of the public this is bad for everybody, right? When, in reality, it’s not bad for everybody at all. It’s only bad for them.”
These points from Grudnoff echoed what Adam Bandt said at the National press Club on Wednesday — that ultimately, this money being taken from incredibly deep pockets to benefit the public is just a smart way to fund things the people of Australia need.
“We’re just saying when you make these huge profits, do what other countries do and give a bit of it back to the public because that’s who you’re making the money off,” Bandt told the National Press Club.
“When a nurse pays more tax than a multinational, something is deeply wrong. We can’t keep defending a system where nearly two in three gas corporations pay no tax.”
Will this policy ever pass in Parliament?
In order for the Robin Hood Reforms to ever see the light of day, the Greens need to win enough seats to enter the balance of power.
Unlike a major party that would need to win a majority of seats in Parliament’s House of Representatives to get their policy through, the Greens only need to get just enough which means the major parties will need to bargain with them to have power.
According to Grudnoff, when making deals with a major party like Labor, the Greens will need to make its Robin Hood Reforms a “number one priority”.
“I imagine the Greens can’t get everything they want, so it really depends on how high up the priority list they put it,” he said.
“If the super-profit policy becomes one of their top priorities, it has a reasonable chance at passing.”
In doing so, any party (but most likely Labor) will need to agree to help pass the Greens’ super-profit tax policy in order to make government.
And surprisingly, it’s not even a pipe dream. There is a precedent for this occurring.
In 2010 the Greens were able to use their balance of power to get the Labor Government of the time to add children’s dental care into Medicare.
“As a result, more than 43 million services have been provided to more than three million children,” Adam Bandt said in his speech.
“Now, as we head towards another shared power Parliament, the Greens want to finish the job and get dental into Medicare for everyone.”
Unfortunately, given the backlash the policy received from Richard Marles, maybe the chances of a deal aren’t as much of a slam dunk as Bandt would like.
“I make this point – the Labor party is not about doing deals with the Greens. We are focused on winning a majority at the next election in our own right and doing what we can manage the economy for all Australians,” Marles stated.
Australia is due for an election as early as May 2025, and as late as September 2025. So I guess we’ll have to wait until then to see if some big new tax policies will help get our teeth fixed.
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