Australian Greens dissenting report

1.1Since the COVID-19 pandemic, the cost of essential goods and services, including rent, food, power bills, health care, mortgage repayments and insurance has skyrocketed. Wages have not kept up, making it even harder for millions of people to make ends meet. There are now more than 3 million people living in poverty.[1]

1.2While millions of people across the country are struggling to make ends meet, big corporations have been raking in massive profits off the back of the community's pain.

1.3For example, Australia’s biggest energy retailer, Origin, reported an almost one third jump in profit to $1.2 billion in the 2023-24 Financial Year. Supermarket giant, Coles, reported an 8% jump in profit to $1.1 billion, and Woolworths increased its profits in its Australian supermarket group. Australia’s largest insurer, Insurance Australia Group, reported a $900 million profit, up 8% on the year before. While Commonwealth Bank raked in a whopping $9.48 billion profit.[2]

1.4The share of income going to big corporations has never been higher,[3] while wages have fallen back to have the same purchasing power they did in September 2011.[4]

1.5The latest ATO Corporate Tax Transparency report shows one third of corporations paid no tax in Australia in the last financial year, including the airline giants, Virgin and Qantas.[5]

1.6Billionaires are also massively increasing their wealth despite the cost of living crisis. Oxfam found that between 2020 to 2023, the wealth of the 47 richest billionaires in Australia increased by 70%. Since 2020, the wealth of the three richest people in this country, including mining magnate, Gina Rinehart, has gone up 50%.[6]

1.7The current cost of living crisis and long-term worsening inequality is a direct result of successive Labor and Liberal governments deliberately implementing a neoliberal policy agenda that supports increased profits and power for corporations, billionaires and property investors, while hollowing out public services, eroding income support and attacking workers bargaining power and wages.

1.8In line with their neoliberal ideology, both the Labor and Liberal parties have steadfastly refused to acknowledge the role of corporate profits in driving the post pandemic inflation crisis.

1.9Reserve Bank Governor, Michelle Bullock, and economists across the world, including at the OECD, the IMF, the European Central Bank, the Bank of England, the Federal Reserve and former ACCC Chair Professor Allan Fels agree that some corporations may be taking advantage of their market power and using the cover of inflation to push up prices.[7] Corporate price gouging exacerbates and prolongs inflation inflicted on ordinary people.

1.10Instead of doing something to rein in corporate price gouging and bring relief to people struggling to make ends meet, the Albanese Labor Government’s approach to the cost of living crisis has been at best to tinker at the margins, and at worst, to bake in growing inequality.

1.11The Treasurer, Jim Chalmers, has failed to fully utilise the fiscal policy levers at his disposal to address inflation. As a result, the Treasurer has left the Reserve Bank to use the only tool it has to fight inflation: smashing mortgage holders and renters with record rate hikes. Monetary policy is a blunt tool that punishes those least responsible for inflation the most. This is why the Greens are calling for the Treasurer to use his powers under Section 11 of the Reserve Bank Act to force the Reserve Bank to cut interest rates.

1.12The Greens push to freeze and cap rents, put dental into Medicare and ban corporate price gouging would all deliver much needed cost of living relief to people and bring down inflation without having to rely on record rate hikes.

1.13The Liberals’ approach to the cost of living crisis is even worse than Labor’s. The majority of recommendations in this report, including reducing regulation of big corporations, cutting public services and further eroding worker power, would continue to drive the massive gap between workers wages and corporate profits, between income support payments and billionaires skyrocketing wealth.

1.14As long as the Liberals and Labor continue to accept millions of dollars in corporate political donations each year, they will continue to implement policies that benefit massive corporations and billionaires over the interests of ordinary people.

1.15For people struggling right now, a choice between Labor and Liberal is no choice at all.

1.16The Greens do not accept donations from massive corporations. We will always fight for the interests of renters, families, young people and workers over corporations and billionaires.

1.17To urgently bring down the price of essential goods and services and lower inflation, the Greens will impose a new Robin Hood Tax of 40% tax on the excessive profits of big corporations to fund cost of living relief, including:

(a)Putting Dental and Mental into Medicare

The Greens will put dental into Medicare for everyone. Too many Australians cannot access the dentist because going to the dentist is expensive, and most people are not eligible for public dentistry.

This will save around $978 in a year for an adult, and around $350 in a year for a child.

The Greens will remove the cap on psychologist sessions through the Better Access Scheme and increase the rebates to $150 for both registered and clinical psychologists. For people seeing a registered psychologist through the Better Access Scheme.

This will save around $534 for 10 sessions in a year or around $1067 for 20 sessions in a year.

(b)Helping you see the GP for Free

The Greens will increase the bulk billing incentive for GPs and increase the rebate for longer appointments. The Greens will also establish 1000 free local healthcare centres, where people can access free appointments with GPs, dentists, psychologists, and nurses.

The Local Healthcare Centres will save an adult around $324 in a year, and will save a child around $338 in a year.

(c)Wiping Student Debt

The Greens will wipe all student debt, putting thousands into people’s pockets every year.

For someone who has an average student debt and who earns an average income, wiping student debt would result in a debt of $27,600 being wiped and a saving of $5,500 a year.

1.18To address the cost of living and housing crises the Greens will also:

(d)Freeze and Cap Rents

The Greens will freeze rent increases for two years, followed by an ongoing cap on rent increases of 2% every 2 years.

This could save the average renter up to $4,000 in the first year.

Renters in the 610,000 publicly built homes could save up to $16,600 a year on average.

The Greens plan to establish a public developer which would build good-quality genuinely affordable homes, to be sold for just over the cost of construction, or rented for no more than 25% of a tenant's income.

(e)Crack down on supermarket price gouging

The Greens will make price gouging illegal and introduce divestiture powers to break up the supermarket duopoly. This will reduce the price of food and groceries.

1.19That the Labor Government and the Coalition as a matter of priority support the Greens’ push to tax big corporations to fund urgent cost of living relief, including to put Dental into Medicare, enable people to go to the GP for free, and wipe student debt.

1.20That the Labor Government and the Coalition as a matter of priority support the Greens push to freeze and cap rents to make housing more affordable and to ban price gouging and introduce divestiture powers to crack down on supermarket price gouging and reduce the price of food.

Footnotes

[1]Department of Social Services, Economic Inclusion Advisory Committee 2024 Report to Government, 2024, p. 20, https://www.dss.gov.au/sites/default/files/documents/04_2024/13404-eiac-report-dv-08.pdf.

[2]Latest annual reports of respective companies.

[3]Total Factor Income: 2023-24 National Accounts https://www.abs.gov.au/statistics/economy/ national-accounts/australian-system-national-accounts/latest-release

[4]Wage Price Index:Quarterly Index;Total hourly rates of pay excluding bonuses;Australia;Private and Public;All industries; TREND [September quarter 2024] and Consumer Price Index:Index Numbers;All groups CPI;Australia [September quarter 2024]

[5]Australian Taxation Office, Corporate Tax Transparency Report 2022-23, https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/large-business/corporate-tax-transparency/corporate-tax-transparency-reports

[6]Oxfam, Wealth Analysis, January 2024, https://media.oxfam.org.au/2024/01/wealth-of-three-richest-australians-has-doubled-since-2020-as-cost-of-living-pressures-for-many-continue-to-bite-oxfam/

[7]Economics Legislation Hansard, Additional Estimates Hansard, 15 February 2024, p. 11, https://www.aph.gov.au/Parliamentary_Business/Senate_estimates/Economics/2023-24_Additional_estimates; The Centre for Future Work at the Australia Institute, Profit-Price Inflation: Theory, International Evidence, and Policy Implications, September 2023, pp. 9-16, https://australiainstitute.org.au/report/profit-price-inflation-theory-international-evidence-and-policy-implications/; Australian Council of Trade Unions, Inquiry into Price Gouging and Unfair Pricing Practices, February 2024, p. 2, https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf