Income tax cut packages since 2017 will cost the budget $325bn by the end of the decade, with high-income earners capturing 58% of the benefit.
That is the result of a Parliamentary Budget Office analysis prepared for the Greens, released on Saturday ahead of a speech by Adam Bandt vowing to use the balance of power to force a future Labor government to repeal the next round of cuts.
In a speech to the Greens national conference, Bandt will also inflame tensions within Labor by noting that backbencher Joel Fitzgibbon has called on his party to allow stage-three cuts for middle- and high-income earners to stand.
In June 2019, Labor reluctantly passed the third stage of tax cuts, which will flatten tax brackets so that income between $45,000 and $200,000 is taxed at the rate of 30%.
Labor is yet to decide whether to contest the next election on a promise of repealing the cuts, which would free up $130bn for other spending but open it up to Coalition attacks that Labor is the party of higher tax.
The Parliamentary Budget Office assessed successive rounds of income tax cuts since 2017 and found they will give the top quintile of income earners an extra $189bn by 2030-31, dwarfing the benefit to the lowest income earners, who get $440m, and the middle-income earners, who get $50bn.
In all, those currently earning $87,000 or more will receive 58% of the benefit, while those earning $57,000 and above will get 22.8%.
According to an advanced copy of his speech, Bandt says that by 2030 successive rounds of tax cuts will cost the federal budget $43bn, three times what is spent on public schools.
Bandt says the poorest 20% of income earners will receive just 0.1% of the benefit, while the middle group “gets a humble 15% of these tax cuts”.
Bandt attacks Labor for voting for the Coalition’s tax cuts, arguing the Greens are the only party “left fighting in parliament to put the millions ahead of the millionaires”.
“But it’s not too late. The worst of the tax cuts is stage three, which doesn’t kick in until 2024. That will be after the next election.”
Bandt argues if opposition parties can “turf the government out” and the Greens can achieve “shared power”, they will use it to stop the third stage of tax cuts.
“Labor voted stage three into law, but after we’ve changed the government at the next election, we’ll push them to join the Greens and end this flat-tax trickle-down nightmare.”
Bandt noted that Fitzgibbon had, “in a parting shot” as he stepped down from the frontbench, called for Labor to support stage three.
Despite not bringing forward the third stage of tax cuts in the 2020 budget, the treasurer, Josh Frydenberg, has said the government is “absolutely” committed to their introduction, legislated to begin in 2024.
Labor’s shadow treasurer, Jim Chalmers, has said the third stage of tax cuts is “the least affordable, it’s the least responsible, it’s the least fair and it is the least likely to get a good return in the economy because higher-income earners are less likely to spend in the economy”.