Prime Minister’s corporate tax cuts fail to pass Senate

MALCOLM Turnbull says he won’t take his plan for corporate tax cuts to the next election.

PRIME Minister Malcolm Turnbull says he won’t take his policy for corporate tax cuts to the next election after it was killed in the Senate.

In a press conference today, Mr Turnbull confirmed he would drop the plan, which would have seen the corporate tax rate drop from 30 to 25 per cent for businesses with a turnover of more than $50 million.

“We have not been able to secure the support of the Senate,” Mr Turnbull. “We’ve negotiated very hard. We’ve offered to exclude the big banks. We offered an amendment to do that.

“So we will not be taking the tax cuts for larger companies to the next election.”

Mr Turnbull said the government would review its enterprise tax plan to see if it could provide more support or to accelerate tax cuts for small to medium businesses.

Despite the failed negotiations, Mr Turnbull said the energy supplement would not be repealed as previously proposed.

“It is absolutely clear to us that with the issue of energy prices being so prominent, we will not move to repeal the energy supplement,” he said.

The Senate voted to sink the tax cuts shortly after Liberal leadership challenger Peter Dutton pledged to abandon the policy.

“I don’t think it’s possible for them to go through and in that case I would support that money being applied either to households or a tax cut to small and micro-businesses,” Mr Dutton told 3AW.

Finance Minister Mathias Cormann made a failed last-ditch attempt to drum up key crossbench support by carving out Australia’s Big Four banks.

But the move did not win their support, with One Nation, Centre Alliance and independent Tim Storer voting against the cuts.

Senator Cormann took aim at Labor for opposing an amendment to exclude the Commonwealth Bank, ANZ, NAB and Westpac.

“If Bill Shorten was elected prime minister on his anti-business, politics of envy, socialist high-taxing agenda it will hurt the economy,” Senator Cormann told parliament.

“Having campaigned supposedly against tax cuts for the big banks every single Labor senator voted in favour of tax cuts for the big banks.”

But Labor frontbencher Doug Cameron lambasted the government over the leadership crisis engulfing the Liberal Party.

“When is Senator Cormann going to join his great mate, Peter Dutton?” Senator Cameron said.

“When is he going to join him and when is the end of this government going to actually happen? I hear that it’s today.”

He said the government should be funding health and education instead of giving an $80 billion handout to big business.

The vote follows a tough week so far for Mr Turnbull, who was forced to announce a backflip on his energy policy on Monday, saying he didn’t have the numbers to get an emissions reduction target included in legislation

Malcolm Turnbull says negotiations continue on the corporate tax cut. Picture: Lukas Coch/AAP

Ahead of the vote Queensland Labor senator Murray Watt said he couldn’t see any prospect of the tax cuts passing parliament.

“If any party, whether they be Liberal, One Nation, or Labor, backs in these tax cuts, they’ve got a death wish,” he told reporters in Canberra on Monday. “Australians are firmly against these tax cuts.”

There are reports the prime minister is preparing to abandon the policy “barnacle” if the vote is defeated.

But holding a press conference on Sunday, the prime minister insisted his flagship corporate tax reforms weren’t dead yet.

“Negotiations continue,” Mr Turnbull said.

“We are determined to ensure that our company tax system, our business tax system, is competitive.”

Finance Minister Mathias Cormann also insisted the government is “fully committed” to the cuts.

“The government remains fully committed to securing the passage of our proposed tax cuts for all businesses,” he told The Australian.

Deputy Nationals Leader Bridget McKenzie is urging the government to stick with its tax cut plans.

“We need an internationally competitive tax rate for our globally exposed industries,” she told Sky News.

Shadow treasurer Chris Bowen is watching the crossbench negotiations closely. Mr Bowen is concerned crossbenchers could agree to fast-tracking tax relief for small companies, which has already been agreed to, in return for their support for big business tax cuts.

Labor estimates bringing forward tax cuts for businesses turning over under $50 million could cost the budget $1.8 billion over the next four years, and $6.5 billion in the medium term.