Malcolm Turnbull forced to axe business tax cuts package

MALCOLM Turnbull has dumped his company tax cut plan as he tries to maintain his grip on power.

MALCOLM Turnbull has dumped his company tax cut plan as he tries to maintain his grip on power.

In another backdown on a signature policy, the Prime Minister confirmed he would not take his failed plan to reduce company tax from 30 to 25 per cent to the next election.

TURNBULL’S LEADERSHIP IS TERMINAL

As he mocked Peter Dutton’s idea of cutting GST on power bills as “very expensive”, Mr Turnbull left open the option of fast-tracking tax relief for small business.

He did not rule out diverting some of the saving towards spending on other areas in a bid to take on Labor over health, education or infrastructure commitments.

In another backdown on a signature policy, the Prime Minister confirmed he would not take his failed plan to reduce company tax from 30 to 25 per cent to the next election. Picture: Ray Strange

Dumping the company tax reforms came after the Senate rejected the plan as expected.

As he moved to jettison unpopular policies, Mr Turnbull also abandoned plans to scrap the Energy Supplement, which was meant to compensate welfare recipients for the carbon tax by up to $7 a week.

It follows Mr Turnbull’s decision to dump his national energy policy and legislated emissions reduction targets.

Both policies were unpopular with renegade MPs who have backed Mr Dutton.

The former Home Affairs minister is understood to have pushed for the company tax cuts to be shelved after they gave ammunition to Labor in the Longman by-election.

Mr Turnbull confirmed the Government had offered to exclude banks from the cuts in negotiations with Pauline Hanson and other Senate crossbenchers but this was not enough to win their support.

Admitting he had to accept “the iron laws of arithmetic” in the Senate, Mr Turnbull also took a swipe at Labor for blocking the tax cut plan.

“I think the truth is that the political climate which used to have a broad bipartisan consensus – as you heard from so many Labor leaders and Treasurers – that lower company tax creates more investment, higher productivity, more jobs and higher wages, a proposition that has been proved again and again,” he said.

“While that consensus used to be there, it is there no longer and there is a lot more work that needs to be done.”

Treasurer Scott Morrison said the savings would only be $600 million over the four-year forward estimates.

“This is not a sum of money that delivers large personal income tax and things like that,” Mr Morrison said.

Mr Dutton said he wanted the savings diverted “either to households or a tax cut to small and micro-businesses”.