Corporate tax cuts on hold after failing to win crossbench support

The Turnbull government’s plan to lower tax on all Australian businesses will be deferred until after parliament’s long winter break

The Senate will no longer be asked to vote on the Turnbull government’s signature corporate tax cuts this week, with Finance Minister Mathias Cormann announcing the vote would be postponed until August.

The government has been trying to secure the eight votes it needs on the Senate crossbench, with both Labor and the Greens opposed to the plan.

But crucial minor parties are withholding support.

Pauline Hanson’s One Nation does not support the plan, while the Centre Alliance group wants firm guarantees that no government services will be cut as a result of the lost revenue – amounting to about $80 billion over the coming decade.

“I said our intention was to secure the passage of this legislation this week. That was absolutely our intention,” Senator Cormann said.

“But we believe it is critically important to ensure that these business tax cuts, for all businesses across Australia, can be legislated because we want to protect our economic security into the future.”

The government has already passed cuts for businesses with an annual turnover up to $50 million, but wants to extend the reduction from a 30 per cent tax rate to 25 per cent to all businesses, regardless of size.

Independent Senator Derryn Hinch would only support cuts up to a turnover of $500 million, in a move designed to carve out the big banks and large multinationals. The government has repeatedly ruled out such a compromise.

The delay means the Senate vote will not be held until after five by-elections are held in July which both the government and the opposition have described as a referendum on their competing tax plans.

Labor leader Bill Shorten has promised to repeal the already-legislated cuts for businesses between $10 and $50 million in turnover.

Published 28 June 2018 at 10:15am, updated 28 June 2018 at 11:16am
By James Elton-Pym