Labor confident tax plan will be split

Senator Rex Patrick is reportedly "100 per cent behind a digital economy tax proposal". Source: AAP

Decisions over the Turnbull government's personal income and company tax cut plans could come to a head in the next six weeks.

Treasurer Scott Morrison has again avoided providing a year-by-year cost breakdown of his personal income tax cut plan or the running costs of his 10-year corporate tax package.

But he hit back at Labor's numerous tax proposals which he says are also devoid of such detail.

"It is one rule for the Labor Party and one rule for everyone else," he told MPs during the first question time of the parliamentary sitting fortnight.

The seven-year personal income tax plan, a key component of this month's federal budget, is due for debate in the House of Representatives on Tuesday.

Labor supports the first part of the income tax cut plan, which starts with a reduction of up to $530 a year under a low and middle-income tax offset.

But it won't back the Turnbull government's second and third steps, which make changes to certain tax brackets at various stages, until at least the government provides more information on their cost.

The government is adamant it won't split the bill.

Shadow assistant treasurer Andrew Leigh believes that is a "ridiculous proposition".

"This government will hoot and holler for a while but eventually they will come round to doing the right thing," Dr Leigh told Sky News on Monday.

Australian Conservatives senator Cory Bernardi hopes the government doesn't cave in because its plan aims to remove bracket creep, "but I suspect they will".

"Ultimately the government, if it wants to get any tax reform through, is going to have to make some concessions and that may see the bill split," he told Sky News.

However, the Greens wants investment in services and don't support either government or Labor's income tax proposals.

"We won't be engaging in Liberal and Labor's tax cut auction, we're not bidding. What we are bidding for is an increase to universal services in this country," Greens Leader Richard Di Natale told reporters in Canberra.

The remainder of the government's 10-year company tax package also remains stuck in the Senate after falling short of two votes just before Easter.

However, the possibility of a digital economy tax being introduced and aimed at the likes of Facebook and Google may swing Centre Alliance senators Stirling Griff and Rex Patrick who say they are "100 per cent" behind such a proposal.

Treasurer Scott Morrison said in his budget speech he wants to ensure big multinational digital and tech companies pay their fair share of tax and has been working with his G20 counterparts to bring the digital economy into the "global tax net".

Senator Griff believes it would be a positive step and as long there are no cuts to core community services, he would be receptive to a degree of tax relief for everybody, suggesting the company and income taxes can be done by July.

The Senate will next sit in the final two weeks of June.

Stay up to date with SBS NEWS

  • App
  • Subscribe
  • Follow
  • Listen
  • Watch