Labor is facing internal pressure to introduce a new tax on the export of raw critical minerals and also to clamp down on negative gearing.
Both measures are to be debated at the Labor party’s coming national conference, the first since Anthony Albanese led the party to victory at last year’s election.
But the proposal to cap negative gearing at one investment property is likely to be viewed warily by members of the Labor caucus, given Bill Shorten’s proposal to phase out the tax concession for existing houses before the 2019 election loss.
Albanese poured cold water on the negative gearing push on Tuesday, saying the government would stick with the housing policies that Labor took to the 2022 election, including the housing future fund that remains held up in the Senate.
“We are a party that debates our policy live on national TV,” Albanese told reporters on Tuesday.
“It [the national conference] will be held in Brisbane in August and people will put their views there but the cabinet determines the government policy.”
One of the party’s most influential affiliates, the Australian Workers Union, is pushing for “a significant, punitive tax” on the export of raw critical minerals – like lithium, cobalt and rare earths – with the revenue to help subsidise domestic processing and manufacturing.
The AWU’s draft resolution for the Labor national conference says Australia has some of the world’s largest supply of critical minerals, which are “indispensable for the high-tech products integral to the renewable energy transition”.
The draft resolution calls for Labor to “impose a tax on unprocessed exports of critical minerals and establish a production subsidy scheme to foster domestic refining, processing and component manufacturing from critical minerals”.
The AWU’s national secretary, Daniel Walton, will lay out his case in a speech to the Sydney Institute on Wednesday evening. He will say the AWU is “historically intertwined with the Australian Labor party” but they are “certainly not one and the same”.
“When we believe a Labor government is at risk of taking the wrong path, we believe we have a responsibility to speak up,” he will say, according to prepared speech remarks circulated to media in advance.
“My fear is that our government sees its role as just setting basic terms for multinationals to dig these minerals up as fast as they please so they can ship them to wherever they want.”
Walton will say such an approach was “lazy” and “misguided” during the mining boom that focused on iron ore and coal and gas – but “it will be catastrophic if we take that same approach with critical minerals”.
“If we continue to just ‘let the market rule’ it will mean only one thing: Australia’s raw materials will be shipped off to China and China will be the only player in our region with the sovereign capacity to turn them into anything useful,” he will say.
Walton will point to the Biden administration’s Inflation Reduction Act as a big signal that the US is “willing to use its unparalleled might to start driving manufacturing investment onshore”.
“When the 800-pound gorilla in the global room switches tack like this, everyone else is compelled to recognise things have changed,” he will say.
Walton will say while the US can use its raw economic heft and scale to force investment in manufacturing capacity through subsidies, Australia is not in the same position to “call the shots like this”.
“But what we do have is a big chunk of the world’s critical minerals within our sovereign soil. That’s our leverage and we would be absolute fools not to use it.”
The Nine newspapers reported that the separate calls for a crackdown on negative gearing were motivated, in part, by a desire to win back younger votes in the capital cities who were attracted to the Greens’ housing policies.
The delegate advancing the proposal, Julijana Todorovic of the internal grouping Labor for Housing, told the Nine newspapers that the draft national platform chapter was “five lines of fluff”. She reportedly wants to cap negative gearing at one investment property.
Labor MP Josh Burns, who has advocated for housing as a human right, said it was “ridiculous” that the Coalition, Greens and One Nation were blocking Labor’s $10bn Housing Australia Future Fund bill.
“We’ve got to pass that as a start,” he told Guardian Australia. “After that we can look at what we can do to ease housing supply issues.”
Burns refused to be drawn on the negative gearing push but said the government needed “to be honest about our tax arrangements”, praising the release of the tax expenditure statement in February. It showed in 2019-20 taxpayers reported total rental losses of $10.2bn.
Albanese said on Tuesday: “I saw the article and it says there will be a policy debate about issues at ALP national conference. Ho-hum. There’s policy debates about everything. That’s why we have an ALP national conference.”
The treasurer, Jim Chalmers, told the ABC’s Q+A program the government had not contemplated changes to negative gearing in last week’s budget because it had “found other ways to boost supply in the housing market”.
“We increased commonwealth rent assistance, not because we think that that will make all the pressures in the rental market disappear, but because it will provide a bit of help for people,” Chalmers said.
After losing the 2019 election promising a broader crackdown on tax concessions including negative gearing, capital gains tax concessions and excess franking credits for those not paying tax, Labor abandoned these policies ahead of the 2022 poll.
