‘The money exists’: New tax could end crisis

Billions of dollars would be collected from big businesses and funnelled into new housing stock should a bold plan to fix the national crisis be adopted by the federal government.

The Construction, Forestry, Maritime, Mining And Energy Union national secretary Zach Smith will outline his reforms for an economy-wide super profits tax at the National Press Club on Tuesday.

Mr Smith, in extracts from an his address, said the change would rake in the $28bn needed per year by taxing the excess earnings of corporate giants to bolster flagging social and affordable housing stock.

“There’s such a strong appetite out there for an idea like this one. It could define this government as one of the great Australian governments,” the union boss will say.

“It could go down in history as the government that ended the housing crisis … and taxed super profits.”

Research from Oxford Economics Australia, commissioned by the CFMEU, found Australia is facing a current shortfall of 750,700 social and affordable dwellings.

That gap is forecast to grow to 946,000 dwellings by 2041.

The figures are broadly in line with the National Housing Finance and Investment Corporation’s forecasts of an 866,000 shortfall by 2040.

An estimated investment of $511bn, or $28bn per annum, is required to close the housing gap by 2041, Oxford Economics Australia said.

Figures by the organisation suggest an economy-wide super profits tax would raise $290bn over the next decade alone — enough to cover off the investment shortfall.

“This includes $128 billion from mining projects (excluding those already covered by other resource rent taxes) and $163 billion from non-mining companies with turnover greater than $100 million,” the research said.

The CFMEU will launch a national advertising campaign to promote the bold pitch ahead of the Australian Labor Party’s national conference next month.

Mr Smith has flagged he will move a motion in support of the reform to change the party’s policy platform at the conference in Brisbane.

“The money exists. The wealth exists. But it doesn’t exist in ordinary Australian households,” he will tell reporters in Canberra.

“It exists in the profit columns of a very small and very elite group of corporations. And we just have to funnel – just a portion of it in the right direction.”

Labor went to the last election promising to establish a $10bn housing fund – the Housing Australia Future Fund – to spend up to $500m per year to build 30,000 affordable homes over five years.

But the legislation has stalled in the Senate for months after the Greens stood firm on their demand for the government to spend closer to $5bn each year to address the social housing shortfall.

Mr Smith will use his speech to slam successive governments for suggesting “only the market can be relied upon to create progress”.

“It is nonsense. Not only can government step in to fix big intractable national problems – it must,” the union boss will say.

“The state has a role to play and Australians want the state to play it.”