Key senator Rex Patrick in trade-off talks on tax package

Centre Alliance Senator Rex Patrick has been “brainstorming” with Finance Minister Mathian Cormann.

Centre Alliance senator Rex Patrick. Picture: Kym Smith.

Finance Minister Mathias Cormann has held a “brainstorming session” with key Senate crossbencher Rex Patrick on measures to reduce gas prices, as the government attempts to win support from Centre Alliance for its flagship income tax cuts package.

Senator Patrick, who with Centre Alliance colleague Stirling Griff holds two crucial Senate votes, was in Perth on Monday to discuss short- and long-term ­options to lower the domestic gas price, including tools to make the price more transparent.

Resources Minister Matthew Canavan and energy experts also attended the daylong meeting, where Senator Patrick demanded action on gas prices and suggested a change to the Australian Domestic Gas Security Mechanism.

The South Australian senator also wanted assistance for pensioners in exchange for Centre ­Alliance’s vote for the $158 billion income tax cuts plan, but told The Australian any agreement would not constitute a “special deal” with the government.

“We want something (gas prices) fixed. That’s not to say we want something fixed immediately before we would consider tax cuts,” Senator Patrick said.

“We’re now in a situation where, after the (introduction of the) ADGSM, supply is not the problem. There is enough gas, it’s now down to the price. The government has been looking at this as well. Now the government will go away and conduct its own analysis on each of those options (discussed on Monday).

“There’s no point giving everyone a tax cut to stimulate the economy and give them disposable income to only have that chewed up by rising energy costs.”

Negotiations between Centre Alliance and the government are progressing but may not be finalised before parliament returns on July 2, as Josh Frydenberg uses his overseas trip — primarily for the G20 finance ministers’ meeting — to talk up tax cuts.

“What I will take from this trip is about the US and tax cuts. The US (economy) is a pretty good advertisement for their tax cuts. The other thing to come out of the US is their focus on deregulation,” the Treasurer told The Australian.

“What everyone is saying (on this trip) is that the only way to have sustainable growth is not through monetary policy, it is through productivity. The Labor Party seem to want to deny Australians the tax cuts that they voted for, so they are ignoring the will of the Australian people.”

Labor is refusing to back the whole income tax cut package as it asks for modelling on how much of the tax cuts will flow to Australians earning more than $180,000, which the government is refusing to provide. Former deputy Labor leader Tanya Plibersek questioned where money would be cut from to deliver the tax cuts.

“This is a time when our economy is under all sorts of pressure, internally and globally, including potential trade wars with our major trading partners. (That is) something that we should be cautious about,” she told ABC radio.

“They’re asking us to pass, sight unseen, tax cuts that come into play in 2024-2025.

“It’s irresponsible. Where’s the money coming from? We’ve said that we’ll look at it but we need a lot more information.”

The major sticking point for Labor is the third and final stage of the government’s plan, which from 2024-25 lowers the tax rate from 32.5 per cent to 30 per cent for Australians earning between $45,000 and $200,000. The third phase costs the budget $95bn in the medium term to 2029-30.