Highlights

  • The Greens would lift the tax-free threshold from $18,200 to $26,000, a cut worth up to $1,092 a year.
  • The Parliamentary Budget Office costed the package at $22 billion a year, funded from gas and mining.
  • The $1,092 figure matches the 14% lowest tax rate from 1 July 2027; the current 15% rate implies $1,170.
  • A worker earning $20,000 would gain little, because the low income tax offset already erases their tax.

The lectern at the National Press Club on 28 October belonged to David Shoebridge, and his message was aimed squarely at the pay packet. Launching the Greens' first major policy as leader, he proposed lifting the tax-free threshold from $18,200 to $26,000, a cut worth up to $1,092 a year, or $21 a week. The Parliamentary Budget Office (PBO) has costed the package at $22 billion annually. It landed on the very day inflation was reported at 4.3%, so the timing could hardly be sharper.

What the Greens are proposing

The plan would raise the threshold to $26,000 for all taxpayers. The same $21 a week would be added to every income support payment, including JobSeeker, student and carer payments and the Age Pension. The reported details did not specify a start date.

The Greens say the money would come from "rivers of gold" in gas and mining, led by a 25% gas export tax that Mr Shoebridge says would raise $17 billion a year. "We pay more tax on beer than the gas corporations pay on their war-soaked super profits," he said.

This is a proposal from a minor party, not legislation. It would need the support of the Labor government to become law.

Checking the $1,092 figure

The weekly maths is simple: $21 multiplied by 52 weeks gives $1,092. The tax maths takes more care. Lifting the threshold by $7,800 removes tax on that slice of income at the lowest marginal rate.

Under enacted law, that rate is 15% for 2026-27 and falls to 14% from 1 July 2027. At 15%, the maximum saving would be $1,170. At 14%, it is $1,092. So the Greens' number lines up with the 14% rate of 2027-28, and a change applied in 2026-27 would deliver more. The party has not been reported explaining which year the figure is based on.

Who gains, and by how much

Take a hypothetical worker earning $60,000 in 2027-28. Under current law, tax is 14% of $26,800 ($3,752) plus 30% of $15,000 ($4,500), or $8,252 before offsets and the Medicare levy. With a $26,000 threshold, it becomes 14% of $19,000 ($2,660) plus $4,500, or $7,160. The saving is $1,092 a year.

A part-time worker on $20,000 would see little change. Tax before offsets would be $252, and the low income tax offset generally wipes that out, so a higher threshold adds little or nothing through the tax system. A JobSeeker recipient with little other income would gain on the payment side instead, where $21 a week is worth $1,092 over a full year.

Why the threshold matters

The threshold has sat at $18,200 since 1 July 2012, when it was lifted from $6,000. Wage growth and inflation have since pushed more income into the taxable range. A higher threshold is a flat-dollar cut: everyone earning above $26,000 would broadly receive the same maximum benefit, which makes it proportionally more valuable to lower and middle earners than a cut to higher rates.

Inflation, cost and the Senate

The ABS reported annual CPI at 4.3% in the year to September, up from 4.0% in August, with automotive fuel up 23.6%. Mr Chalmers said budgets are not the primary driver of prices and that the government had found "almost $180 billion in savings" since taking office.

In the Senate, Labor depends on the Greens or the crossbench. The Greens have threatened to withhold support for the government's R&D tax changes unless oil and gas companies are excluded from roughly $350 million a year in R&D tax credits.