Coalition rules out deals with crossbench on $158b tax cuts

The government has ruled out doing deals with the Senate crossbench on its $158b tax cuts, putting pressure on Labor to support the package in full.

Hip pocket relief for up to ten million Australians could be delayed as Scott Morrison’s government rules out doing deals with the Senate crossbench over its $158 billion income tax cuts.

The Coalition appears increasingly confident it can pass the reforms without horsetrading with Pauline Hanson’s One Nation or Centre Alliance senators and is instead ramping up pressure on Labor.

Home Affairs Minister Peter Dutton denied the tax cuts could be at risk if the government refuses to negotiate with the crossbench amid reports today that Finance Minister Mathias Cormann has ruled out doing deals.

Asked if the tax cuts were ‘dead in the water’ on the Nine Network’s The Today Show, Mr Dutton said: “No. It means that Labor Party need to support us in the Senate to get through what was a mandate.”

Opposition leader Anthony Albanese has not ruled out backing the $158 billion income tax cuts. Picture: Colin Murty/The Australian

Opposition leader Anthony Albanese did not rule out backing the full $158 billion package but said Labor would wait for information on how the reforms could impact the budget.

Appearing with Mr Dutton on the program, Mr Albanese said: “We are still waiting for that information from the Government. We will make a sober assessment based upon the facts.”

“What we don’t do also is disregard the impact on the economy. Because it is a triumph of hope over economic reality for Peter Dutton or Mathias Cormann or anyone else to say they know what the economy will look like in 2025.”

It comes as a senior Labor MP was quoted anonymously in The Australian today urging the party not to block the tax cuts or risk being seen as blockers after their shock election loss.

“At the end of the day, you just can’t block tax cuts,” the MP was quoted as saying.

Labor backs the initial stage of the tax package, which involves tax cuts of up to $1080 for millions of workers.

But it has yet to back lowering the tax bracket for all workers earning between $45,000 and $200,000 from a 32.5 per cent tax rate to 30 per cent.

Finance Minister Mathias Cormann is staring down Labor and the crossbench on the tax cuts. Picture: AAP

Pressed on whether he was playing ‘hardball’ with the crossbenchers, Senator Cormann told Sky News this morning: “We will continue to engage with them in good faith but as far as our plan for income tax relief for all working Australians is concerned, it’s the plan that we took to the election.”

Senator Cormann has refused to split the tax package and is ramping up pressure on Labor to support the full plan.

“There is no way the government will agree to split our income tax relief plan for all working Australians­,” Senator Cormann wrote in The Australian today.

“It was a firm election commitme­nt and is central to our plan for a stronger economy.

“Any attempt by the Senate to split our plan would be rejected by the government in the House of Representatives.

“So the way for Labor to help deliver income tax relief for low-income earners quickly is by voting­ for our entire plan both in the house and in the Senate in the first week of July.”

Workers earning up to $90,000 are already due to get a tax cut of up to $530 from July 1.

But the bigger tax cuts will either need Labor’s support to pass or the backing of four out of six crossbench Senators.

Senator Hanson last week said she would not back the tax cuts “at this stage” and issued demands for the government to invest in a new coal-fired power station, a water security scheme and a royal commission into family law first.

Centre Alliance senators have called for the government to act on rising power prices in return for their support.

Originally published as Coalition rules out deals with crossbench on $158b tax cuts