Tax cuts backed by Labor will give men $2 for every $1 women get, Greens modelling shows

·4-min read
<span>Photograph: Mick Tsikas/AAP</span>
Photograph: Mick Tsikas/AAP

Greens leader Adam Bandt says Labor is politically “gutless” for backing the government’s stage three tax cuts, releasing modelling showing the cuts will worsen the gender pay gap and give high income earners up to 400 times the benefit of the lowest paid.

Analysis prepared by the parliamentary budget office for the Greens shows that men will receive about $2 for every $1 women receive between 2024 and 2031 under the tax plan, receiving a total of an extra $121.7bn compared with $62.4bn for women over the period.

On average, this will see a woman receive an annual tax cut of $1,180 by the end of the decade, compared with $2,150 for men.

Related: Labor’s capitulation on tax cuts shows the price it will pay to win power | Greg Jericho

The PBO analysis also shows that the vast bulk of the tax plan’s benefit will flow to the highest paid, with about 45% of the cost of the package going to fund tax cuts for those earning more than $180,000 a year.

The top 1% of earners – those with incomes more than $309,000 this year and more than $462,000 in 2031-32 – will be $11.8bn better off over the course of the decade.

This is more than the 40% of taxpayers earning less than $60,000, who will get just $3.1bn – or 1.7% – of the total $184bn paid out by 2031.

The average tax cut for the top 20% of earners will be worth $4,230, compared with just $10 extra for the lowest paid – 400 times the benefit.

Under the controversial final stage of the government’s tax package, the 37% tax bracket will be scrapped and the top 45% bracket will be lifted and kick in at $200,000.

All people earning between $45,000 and $200,000 – which accounts for 70% of the workforce – will be taxed at 30%, down from 32.5%.

Last year’s budget brought forward the second stage of the government’s planned income tax cuts that were due to come in next year, while this year’s budget extended the low and middle income tax offset, announced as a temporary measure in 2018.

Bandt said Labor’s decision to capitulate and support the final stage of the tax cuts – a position signed off by caucus last week after more than two years of internal debate – would be a political opportunity for the Greens at the next election.

“If you want to kick the Liberals out but have a government with progressive values, the only option now is to vote Green,” Bandt said.

“We don’t throw our values overboard. We will go to the next election defending a progressive tax system, pushing for a new tax on billionaires and fighting for an Australia that is more equal – we won’t waiver on those values.”

Related: Labor agrees to keep Coalition’s stage three tax cuts and dump negative gearing changes

He said Labor had chosen to “join the Liberals in being a flat tax party”, and the Greens would be vigorously campaigning against the party on the decision.

“It’s a trickle down hand-out for rich men [and] will turbocharge economic and gender inequality in Australia,” Bandt said.

“Elections should be about offering different visions for the country – it has to be about reaching for the stars, not a race to the bottom.

“I think it is ultimately politically gutless. People respond well when you say ‘we will tax the billionaires and put the money into services that make your life better’, and that is the approach that we will be taking.”

Labor has defended its decision to support the government’s full tax package, which has already been legislated, saying it would provide “certainty and stability” and clear the decks for the next election.

“I’ll tell you what this election will be about: it won’t be about differences on these already legislated tax cuts. It’ll be about whether we can have a stronger, more sustainable, more inclusive society and economy after Covid than before,” the shadow treasurer, Jim Chalmers, told the ABC on Tuesday.

Bandt also said that in the event of a hung parliament, the Greens would be pushing for the repeal of the stage 3 tax cuts and a new billionaires tax, saying it would be in a position to “force a rethink” on Labor if it wanted to form government.

“We would be putting our whole policy platform on the table, if it came to that situation, but on this issue that is what we would be pushing and that would be a priority for us.”

The Greens are proposing an annual extra 6% wealth tax on billionaires for Australia’s 122 wealthiest citizens that would raise about $40bn over the decade.

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