Greens demand tougher tax changes but support likely

· Michael West

Controversial tax changes in the budget are a “step in the right direction” but the Greens want the government to go further before pledging to give their support.

The progressive minor party’s vote is crucial to Labor’s hopes of getting legislation through the Senate, given the coalition has vowed to repeal the changes to investor tax breaks if elected.

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While the government has faced significant blowback from small business owners and landlords over the changes to the capital gains tax discount and negative gearing, Greens economics spokesman Nick McKim said Labor hadn’t gone far enough.

“Faced with a once in a generation opportunity to shift more of the tax burden onto super wealthy people, and in particular super wealthy property speculators, Labor blinked,” he told ABC Radio on Friday.

The Greens vote is crucial to Labor’s hopes of getting the tax legislation through the Senate. (Mick Tsikas/AAP PHOTOS)

The changes were a “step in the right direction”, but Senator McKim said the Greens would fight the government on its decision to grandfather the tax changes for existing property investors, which had in effect “pulled up the drawbridge” in front of young people.

“We would claw far more back from super wealthy property investors, and we would invest that into a genuine tax break for working Australians that would help them at the moment as they’re getting smashed as prices are going up everywhere,” he said.

Business groups have urged the government not to rush the tax package through parliament, with legislation for the capital gains tax and negative gearing changes expected to be introduced in the next sitting fortnight, which begins on Monday.

The proposal to remove the 50 per cent capital gains discount in favour of a minimum 30 per cent tax and indexation of the cost base has been slammed by the startup sector, which warns entrepreneurs will flee the country in search of a more favourable tax regime.

Opposition Leader Angus Taylor said the taxes were “toxic” and the government was scrambling for the exit.

The government has been consulting with the sector since before the budget about a potential carve-out, but Prime Minister Anthony Albanese has ruled out substantially amending the tax changes.

The startup sector had a valid point, conceded Assistant Minister for the Digital Economy and former tech businessman Andrew Charlton.

“That new regime doesn’t interact well if you have a really low capital base because you’ve got nothing to inflate off,” he told Nine’s Today program. 

“So, there are real concerns out there.”

The government is more open to amending a proposal to impose a 30 per cent tax on discretionary testamentary trusts, which has sparked a campaign branding it a “death tax”, according to reports in Nine newspapers.

Discretionary testamentary trusts are used by some wealthy families to divide money in a will while ensuring asset protection, flexibility and control over how wealth is passed on, Chartered Accountants ANZ policy executive Geraldine Magarey said.

“They’re typically used by families with substantial assets, often property, investments or small‑business wealth, and are especially valuable where there are children, vulnerable beneficiaries, or a desire to manage wealth across generations,” she said.

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