Cabinet ministers to urge Malcolm Turnbull to dump his company tax cuts policy in by-election fallout
MALCOLM Turnbull’s prized company tax cuts for big business could be the first policy on the chopping block in the fallout of the Super Saturday by-election results.
NSW
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THE Turnbull cabinet will consider dumping planned company tax cuts, as senior party figures contemplate whether they need to retool their policies or their leader after a car-crash result in the Longman by-election
The federal government has been rocked after recording a primary vote of just 29 per cent in the Queensland electorate — with a swing against it of 10 per cent.
MPs in marginal seats across the country were in shock yesterday at the result in which One Nation’s vote doubled to 15 per cent and Labor’s primary vote hit 40 per cent.
Even though governments traditionally lose by-elections and the LNP ran a “dud candidate” who lived outside Longman, senior Coalition figures are concerned Prime Minister Malcolm Turnbull is “poisonous” in Queensland and they are questioning if the government’s immigration and energy policies should be more conservative.
The Daily Telegraph understands cabinet will debate company tax cuts for businesses turning over more than $50 million at its next meeting, with some ministers pushing to dump the policy immediately.
Another option to be discussed is to pass tax cuts for companies turning over up to $400 million a year, to exclude the big banks.
Coalition sources said they could not afford to burn more political capital on the policy, with Labor’s line that the government was ripping money out of hospitals to give to the big banks proving highly damaging during the campaign.
One senior Liberal questioned “whether we are doomed in Queensland” and said colleagues had been “a bit shocked” by the Longman result.
“A primary in the 20s is pretty sobering,” he said.
“There’s been a flurry of calls between colleagues concerned, not just in Queensland but in marginals elsewhere, about that it means for them.
“Malcolm is not as popular in Queensland as he might be in other markets … Then there’s energy and migration policy.
“People will be searching for answers and will be looking for what options there are.”
If the 3.71 per cent swing to Labor on a two-party-preferred basis was replicated at the next general election, the Coalition would lose seven seats in Queensland alone.
Some MPs who spoke to The Daily Telegraph yesterday called for a crackdown on immigration or energy policy to deal with conservative voters deserting the Coalition for One Nation.
Mr Turnbull said he had not expected to win the by-elections but conceded the government needed to reassess its strategy.
“We will look very seriously and thoughtfully and humbly at the way in which the voters have responded,” Mr Turnbull said.
The weekend’s by-election results also put a spotlight on the Coalition leadership as senior sources said both Mr Turnbull and Deputy Prime Minister Michael McCormack were not well received outside NSW and Victoria, with problems emerging in regional areas and Queensland.
Labor MPs yesterday said the result put a lid on leadership speculation which had been plaguing Bill Shorten.
Mr Shorten said he would not be “arrogant” about the results and that Labor still faced a tough battle in the lead-up to the next election.
“What I do think is I had the better candidates, I think we had the better policies,” he said.
“The reason why we could offer promises in health care and school funding and looking after people’s jobs is because we’re not giving tens of billions of dollars away to big banks and big corporations.”
Defence Industry Minister Christopher Pyne yesterday admitted the company tax cut plan had its problems.
“Selling company tax cuts for small and medium enterprises is a lot easier than selling them for larger companies,” he said.
“But, fundamentally, … if you reduce company taxes, you create jobs, growth, investment and higher wages.
“We need to keep repeating that truism and we will attempt to pass these company tax cuts in the spring session and we’ll work with the Senate crossbench to make that happen.”
Flynn MP Ken O’Dowd, who sits on a 1.04 per cent margin, said the government had to do a better job selling the tax cuts if it planned to continue with the plan.
A Liberal source defended Mr Turnbull, saying the LNP had lost two state elections in Queensland, did not have the cash to buy even one television ad and ran a candidate who was part of the deeply unpopular Newman state government.
The Labor Party spent an estimated $500,000 in the final week of the Longman campaign, with TV ads attacking the government.
Another LNP MP said: “Good luck to anyone trying to win when their primary doesn’t have a four in front of it.”
A senior Queenslander said the Government had to treat Pauline Hanson as a political opponent and not be afraid to point out One Nation’s policy flaws. “We can’t give One Nation any credibility. It’s not a viable alternative. We have to tell people that,” another source said.