Penny Wong issues please explain to Coalition on One Nation company tax cut deal

Penny Wong has demanded the government explain the contents of a company tax cut secret deal it struck with One Nation.

Wong pressed Mathias Cormann in a Senate estimates hearing. Picture: AAP

Labor Senate Leader Penny Wong has demanded the government explain the contents of a secret deal it struck with One Nation in March to try and win their support for the government’s corporate tax cuts before Pauline Hanson pulled out of the agreement.

Senator Wong pressed Finance Minister Mathias Cormann in a Senate estimates hearing today on key aspects of the now defunct deal -- revealed in today’s The Australian -- asking whether the government was outsourcing the formulation of government policy to One Nation and overlooking the Coalition backbench.

Under questioning from Senator Wong, Senator Cormann conceded he did put “aspects” of the deal with One Nation in writing but stressed this was not unusual and was consistent with the way he had negotiated with other crossbenchers.

“Various things that were discussed and agreed were agreed subject to the passage of the legislation. By the time that we finalised the budget... the legislation hadn’t passed,” Senator Cormann said.

He conceded that “things are put into writing in relation to aspects - and that is the usual process”.

“At the right time, if the government secures the necessary support of a sufficient number of senators relevant public announcements will be made”.

He also conceded the company tax cuts were now in serious jeopardy.

“If there is an opportunity to find common ground across a whole range of related policy areas which facilitates securing the passage of important economic reform, then of course the government will engage,” he said. “Looking at the front page of The Australian today it looks we might not ever get to that point”.

Senator Cormann said he would continue to fight for the package because it would keep Australian companies internationally competitive, warning higher taxes would punish workers. He attacked Labor for its obstructionism in the Senate.

“Bill Shorten doesn’t care about Australian workers,” he said. “He’s quite happy to put Australian workers at a competitive disadvantage.. because he believes it serves his selfish political interest”.

Senator Cormann also said that, to the best of his knowledge, no officials from the Department of Prime Minister and Cabinet were present for the discussions with One Nation.

“To my the best of the my knowledge... the officers of Prime Minister and Cabinet were not directly involved in any aspect of the negotiations on company tax cuts with One Nation or any other non-government Senator for that matter,” he said.

Pressed by Senator Wong on whether aspects of the One Nation deal had gone to cabinet, Senator Cormann dodged the question but defended the negotiations as being handled “appropriately”.

“At all times, anything that was put on the table... in the course of the discussions with One Nation Senators... had the appropriate authority, the appropriate policy authority to be put forward in that fashion,” he said.

The key aspects of the deal Senator Wong asked about included a requirement which would force “floating LNG plants” off Western Australia to supply 15 per cent of their gas to the state or pay the equivalent to the state as a form of royalty.

She also asked about the introduction of a “use it or lose it policy” off the WA coast which would shake-up the retention lease system which currently allows LNG companies to sit on reserves that could be developed sooner by rival companies.

The other two aspects of the deal Senator Wong asked about included the tightening of tax deductions under the Petroleum Resource Rent Tax (PRRT) -- a move that would have returned $6bn to government coffers -- and a national pilot apprenticeship scheme.

“We are not in a position where they are adopted government policy,” Senator Cormann said. “At this stage we are in the position where we continue to engage with crossbench Senators... We have not reached a final landing with a sufficient number of crossbench Senators”.

Senator Cormann said that the government was “exploring policy issues” around the retention lease system for gas reserves off the WA coast to ensure Australia could draw an economic benefit for its resources.

He also confirmed that the government had discussed the tightening of tax deductions under the PRRT in the context of the company tax negotiations, noting the PRRT had already been reviewed by independent economic expert Michael Callaghan.