Pressure on Senate crossbenchers to pass corporate tax cuts

Government negotiators will meet with key crossbenchers this week in a last-ditch attempt to win support for corporate tax cuts.

Tim Storer with Leader of the Opposition in the Senate Senator Penny Wong and Leader of the Government in the Senate Senator Mathias Cormann. Picture Kym Smith.

Turnbull government negotiators will meet with key crossbenchers this week in a last-ditch attempt to win support for the second phase of the Coalition’s corporate tax cuts ahead of the May budget.

Finance Minister Mathias Cormann, who is leading talks with the Senate crossbench, yesterday signalled his intention to force the issue to a vote within the current sitting fortnight after the government set a deadline of the end of March for the reforms.

Pauline Hanson’s One Nation party, which controls three upper house seats — while open to discussions with the government — is not yet inclined to support the proposed reduction in the corporate tax rate to 25 per cent for all businesses by 2026-27.

The Australian understands a last-minute appeal by the Business Council of Australia and the Council of Small Business of Australia failed to convince Senator Hanson that a failure to pass on tax cuts to larger companies would flow through to hurt struggling mum-and-dad operators.

Senator Hanson has questioned government claims the tax cuts, for companies with a turnover of more than $50 million, will result in stronger wages growth.

The One Nation leader urged the government to take action on other fronts by reducing immigration numbers, cutting housing prices, slashing electricity costs and putting pressure on the states to reduce payroll tax.

The Nick Xenophon Team, which controls two upper house seats, met last Friday and strengthened its opposition to the government plan which is estimated to cost the budget $35.6 billion in forgone revenue over the decade.

NXT senator Stirling Griff told The Australian yesterday he did not believe it was the right time for the tax cuts to be legislated, saying he was concerned the government might be forced to cut spending.

“It really comes down to the deficit more than anything else. But the fact is you’ve still got a large proportion of people who are struggling with government benefits and the possibility the government will need to cut back on essential services to cover the loss of revenue. That is not acceptable to us,” Senator Griff said.

The government requires nine of the 11 crossbench votes to pass its enterprise tax plan given that Labor and the Greens will use their Senate numbers to block the package, but has won the public support of only three upper house members.

Independent senator Fraser Anning, who was elected on the One Nation ticket before defecting, Liberal Democratic senator David Leyonhjelm and Australian Conservatives founder Cory Bernardi back the company tax cuts.

A number of crossbenchers are yet to declare their hand, including ex-NXT candidate turned independent South Australian senator Tim Storer, who was sworn in ­yesterday, as well as Tasmanian independent Steve Martin, who filled the vacancy left by Jacqui Lambie.

Senator Cormann told the ABC yesterday he “appreciated” the way Senator Hanson had engaged with the government.

Asked whether he believed he was succeeding in changing Senator Hanson’s mind, Senator Cormann said he would not conduct negotiations in public.

He warned the company tax cuts were needed to ensure that Australian businesses were “not disadvantaged compared to businesses in other parts of the world”.