Crossbenchers say they are more unlikely to support corporate tax package

Key crossbenchers say they are more unlikely to back the government’s corporate tax package after last night's budget.

Stirling Griff. Picture: Emma Brasier

Key crossbenchers say they are more unlikely to support the government’s corporate tax package following the delivery of Scott Morrison’s third budget, with Centre Alliance Senator Stirling Griff saying “it’s had a bit of a reverse effect on us”.

The Centre Alliance grouping, formerly known as the Nick Xenophon Team, flagged earlier this week that the budget would help to show whether there was a case for the government’s plan to reduce the corporate rate to 25 per cent for all companies by 2026-27.

But Senator Griff told The Australian today that he was not convinced by last night’s budget, arguing it had provided a further incentive for the Centre Alliance — which holds two upper-house seats — to block the second phase of the government’s tax cuts.

The government is two votes short of passing its corporate tax cut package through the parliament and has won the support of One Nation, which controls three upper house seats, in addition to the crossbench votes of David Leyonhjelm, Cory Bernardi, Fraser Anning and Steve Martin.

Senator Griff argued the budget papers revealed there were not sufficient government revenues in future years to accommodate the $65bn cost of the corporate tax cuts, arguing that the numbers show the “government’s not going to be flushed with significant funds”.

He also cast doubt over the “validity of the additional dollars that are suggested to be coming in in the next two years”.

“They are not going to be awash with money and the concern would still be that, if the economy does end up going a little pear shaped, the funds are going to have to come from somewhere. And we don’t want to see a reduction in core community services”.

He warned the personal income tax cuts to be delivered over the next seven years aimed at removing bracket creep for Australians earning incomes of between $41,000 and $200,000 by instituting a tax rate of 32.5 per cent were committed to without knowledge of future economic circumstances.

“There’ll be another election and possibly a change of government,” he said. “It’s strange on many fronts”

“I thought it was going to be far more positive than what it is. It’s kind of had a bit of a reverse effect on us”.

Independent South Australian Senator Tim Storer who had also opposed the government’s corporate tax package made clear the budget had not changed his mind.

“The personal and company tax cuts proposed by the government do not amount to comprehensive tax reform. They do not encourage me to alter my opposition to any further cuts to company tax,” he said in a statement.

Senator Storer said he was disappointed that, with such a boost in revenue since the mid year economic review, that the government had not found room for an increase in Newstart but welcomed the first round of personal income tax cuts unveiled last night.