Treasurer Scott Morrison has given his clearest signal yet he is willing to compromise on the government's 10-year plan to reduce the company tax rate.
In a week when the Turnbull government has negotiated a $6.3 billion budget savings package with Labor and compromised on superannuation reforms with its backbench, the $50 billion tax plan is next in line.
Mr Morrison insists the government believes strongly in his enterprise tax plan which incrementally reduces the corporate tax rate rate to 25 per cent from 30 per cent.
It would drive private investment, especially in the non-mining sector which was critical to economic success.
The government would work with the parliament to achieve a 100 per cent result, the treasurer said.
"But 100 per cent of nothing is not the sort of pragmatic approach that I think the Australian people expect of this government," Mr Morrison told reporters in Canberra.
Legislation was introduced to the lower house two weeks ago where the government has a slim majority.
However, in a bid to get the first tranche of tax cuts through the Senate, the government may have to split the legislation to ensure the tax rate is cut to an initial 27.5 per cent for businesses with an annual turnover up to $10 million.
The move is likely to win the support of the Greens and the crossbench in the Senate but not Labor, which wants the cuts limited to businesses with a turnover of $2 million.
Australian Chamber of Commerce and Industry chief James Pearson said the bulk of the benefit comes from the signal being sent to all business that the rate will go down to 25 per cent eventually.
"So business can have the confidence to make investments now knowing that 10 years down the track they will be paying a significantly lower tax rate," he told reporters in Canberra.
The opposition took aim at Mr Turnbull for walking away from his "one signature election policy".
"Now we see that the 10-year plan hasn't even lasted 10 weeks," Labor senator Murray Watt told reporters.
"Yet again Turnbull is stuffing up ... this is a hopelessly divided government."
