Labor set for conference housing stoush as big union demands super profits tax

A fight over the housing crisis is brewing ahead of Labor’s national conference as a powerful union throws its weight behind a super profits tax to pay for new homes.

The Construction, Forestry, Mining, Maritime and Energy Union’s proposal to levy the profits of major corporations will inflame the political debate over housing supply alongside a separate Labor Party push to overhaul housing policy, as the Greens maintain their blockade against the government’s signature reforms.

CFMEU head Zach Smith wants a super tax to create more housing.

Alex Ellinghausen

Zach Smith, the new national secretary of the CFMEU – the biggest union donor to the party last election – will use a National Press Club speech on Tuesday to call for a super profits tax to be used to plug an estimated shortfall of 760,000 affordable and social homes.

“Not only can government step in to fix big, intractable national problems – it must,” Smith will say. “The state has a role to play and Australians want the state to play it.”

The pitch appropriates a Greens policy from the last election to impose a 40 per cent tax on corporations with a turnover of more than $100 million, using the revenue to create more low-cost housing.

Smith said a super profits tax was the “fairest way to raise the billions needed to guarantee every Australian has the basic right of shelter”.

Special Minister for State Don Farrell has hinted opposition to Labor’s housing plan could be the first step in a double dissolution trigger.

Alex Ellinghausen

The union will run an advertising campaign, which includes a video depicting a mother facing eviction. It will then take the policy to the ALP conference in Brisbane, where Socialist Left delegate Julijana Todorovic will push to overhaul the housing policy in favour of capping negative gearing and declaring housing a human right.

Labor backbenchers Jerome Laxale, Michelle Ananda-Rajah, and Josh Burns, who represent seats in Sydney and Melbourne with a high proportion of renters, are also calling for a debate on ambitious housing proposals to take to the next election.

Housing has become a critical issue for Labor after the Greens twice voted with the Coalition and One Nation to defer the government’s bill to create a fund to finance the construction of 30,000 social and affordable homes, pushing a potential Senate debate to October.

The Coalition opposes the $10 billion fund on cost grounds, while the Greens are demanding a nationwide two-year rent freeze and a limit to rent increases in exchange for their support for the government’s bill.

The Greens’ opposition has infuriated Labor and some crossbenchers amid a housing supply crisis that is contributing to soaring rents and vacancy rates of 1.2 per cent in the June quarter, according to Core Logic, with single people occupying more than a quarter of residences.

Special Minister for State Don Farrell last month said the government would consider that four-month delay “a failure of the Senate to pass the bill”, hinting it could be the first step in a double dissolution trigger.

Acting Greens leader Mehreen Faruqi said on Monday that Prime Minister Anthony Albanese must negotiate a national rent freeze with state and territory heads after the Victorian government floated a plan to cap rents.

The Greens have separately, previously called for a super profits tax on wealthy companies to fund better service provision for Australians, including affordable housing.

The CFMEU commissioned a report by consultancy Oxford Economics that found a super profits tax could fund the construction of more than 52,000 new dwellings every year between 2023 and 2041, and that the government’s current policies were not enough.

Smith likened it to the petroleum resources rent tax, which taxes the profits of resources companies, adding it would be a challenge “to get the fine details of this tax right … but it’s hardly a unique challenge”.

“It’s not enough to dismiss the core concept as unworkable,” he said.

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