Key Points
- CFMEU is calling for a 40 per cent tax on “excess profits” earned by mining and non-mining companies.
- The tax revenue should be used to solve Australia's housing crisis, the union says.
- The plan is unlikely to become policy.
The Construction Forestry Mining & Energy Union (CFMEU) wants the government to introduce a tax on super profits to raise billions that can be put towards public and affordable housing.
The CFMEU is calling for profits on mining projects and non-mining companies with over $100m annual turnover to be taxed at a rate of 40 per cent.
The union says the tax would only apply to 0.3 per cent of companies making the biggest profits.
CFMEU national secretary Zach Smith said the reform was the only way for the government to “maintain popular support for migration”.
“If we do not build the homes to keep up with our growing population, then the social license for immigration will collapse, and it will collapse fast,” Smith told the National Press Club on Wednesday.
Australia's social and affordable housing shortfall could worsen to nearly a million, according to an analysis from Oxford Economics Australia. Source: AAP / Joel Carrett
A super profits tax would be able to fund the forecast $28 billion per year required to close the housing gap or $511 billion all up, according to the research.
The union will launch a national advertising push and pitch the policy to the government at the Labor Party’s national conference next month.
“Our economy is meant to serve our society. But it is failing on a fundamental level,” Smith said.
“Millions of Australians are worried about their capacity to afford the most basic of human needs.
"We need big structural reform aimed at a serious long-term fix.”
How would a super profits tax affect the rental market?
Chris Martin is a senior research fellow at the University of New South Wales' City Futures Research Centre, whose interests lie in the areas of rental housing and housing affordability.
He said building more social housing would help to bring down rents and ease the pain for renters.
“The CFMEU is absolutely right to be saying that this should be a massive priority of governments because it hasn't been for a couple of decades," he said.
“The social housing sector has been on a starvation ration from governments for about 30 years - it hasn't grown, meanwhile, the community is growing, and our housing needs have grown."
He said the social housing sector would need to triple in size to meet unmet demand.
The Oxford Economics research found a gap of 190,000 social dwellings and 559,000 affordable ones, an overall increase of 114,000 since 2014.
Smith said the proposed tax would be a circuit breaker.
"We must first square up to an obvious truth: to fix a housing affordability crisis, you must build more affordable houses," he said.
Martin said governments don’t need to raise taxes before announcing policies as their budgets are not the same as households.
By proposing a tax, “the CFMEU has identified a useful way of dealing with the potential inflationary consequences of government spending,” he said.
But Martin added that history indicates the policy is likely to be strongly opposed by the resources sector, among others.
"It's reasonable to expect that corporate interests will defend their interests about raising taxation on them," he said.
Will the super corporate profits tax become policy?
Government Services Minister Bill Shorten rejected the plan for a super profits tax and said the government's key housing bill, which has stalled in the Senate, would be sufficient in tackling social housing.
"Housing is a problem. There is no doubt that we need to develop more supply. There's no doubt that people are doing it tough in the rental market," he told ABC TV on Tuesday.
"The government has no plans that I'm aware of to have any sort of super tax, so I think the government's got a strategy, and I think we should stay the course and back in what we know."
Labor has said its Housing Australia Future Fund would only build 30,000 homes over five years.
Under former prime minister Kevin Rudd, the party proposed a 40 per cent resources super profit tax, but the policy's deep unpopularity in part led to Rudd losing party leadership.
His predecessor Julia Gillard tried to water down the policy, but it was eventually scrapped in 2014 when the Liberal Party were in office.
In 2021, Rudd said the party should readopt a resources super profits tax, but senior Labor figures swiftly rejected the proposal.
Then backbencher Patrick Gorman, a former senior adviser to Rudd as prime minister, said there was strong opposition in Western Australia and it would never happen under an Albanese Labor government.
With additional reporting by AAP.
