Hinch accuses senators of horsetrading on company tax cuts

Derryn Hinch has accused senators Rex Patrick and Sterling Griff of ‘trying to grab something for South Australia’.

Senator Derryn Hinch in Canberra.

Derryn Hinch has effectively ruled himself out of further negotiations on the government’s company tax cuts, and accused Centre Alliance senators Rex Patrick and Sterling Griff of “trying to grab something for South Australia” by reconsidering their opposition to the bill.

Senator Hinch said he would agree to extend tax cuts only to businesses with a turnover of up to $500 million, which he justified as a way to carve out the banks.

“The thing I put to the government back last month, I am prepared to go to $500m. But you can’t include the banks, with everything in the royal commission. That’s non-negotiable,” he told The Australian in Villers-Bretonneux, France, where he was ­attending the Anzac Day commemorations.

The proposed $500m threshold would exclude the banks, but it would also deny a tax cut to some of Australia’s biggest employers, including Woolworths (turnover $55 billion), and Wesfarmers (turnover $68bn).

The government has rejected the idea of increasing the threshold at which businesses would get a tax cut, after a deal with crossbenchers last year to deliver tax cuts to firms with a turnover of up to $50m.

“The (Finance Minister Math­ias) Cormann people say you can’t separate some companies ... but they did it to $50m. They were quite happy to do it last year,” Senator Hinch said.

Senator Patrick and Senator Griff have dealt themselves back into negotiations with the government on its $35.6bn enterprise tax plan, telling The Australian this week they were “taking a fresh look” at the policy.

Senator Hinch suggested the former Nick Xenophon Team senators from South Australia were horsetrading for political ­advantage.

“It doesn’t surprise me,” he said. “I actually said to Cormann, ‘I think you’d better go back and try the ex-Xenophon people. I figure neither of them are going to get re-elected so they may as well grab something now for South Aus­tralia if they can.”

The government needs two extra votes to get its big-ticket economic reform through the Senate. It has all but given up trying to convince crossbencher Tim Storer, while Senator Hinch has proven difficult to negotiate with.

Pauline Hanson’s ­office has confirmed the three One Nation senators will vote for the bill, ­despite her call this week for the banks to be denied a tax cut and have the money set aside for victims of bank misconduct and ­future bank bailouts.

The government has considered recalling the Senate for a special sitting to vote on the bill before the May 8 budget, if it can secure the numbers. “The history is if you don’t move quickly with some of these people, the support can evaporate,” one source said.

Senator Griff said he and Senator Patrick would support the bill only if it did not affect core government spending on community services such as health, education, aged care and pensions.

“If we were assured that wouldn’t be the case, yes then we would of course consider what is best for SA,” he said.

The government’s tax plan would lower the corporate tax rate from 30 per cent to 25 per cent for businesses with a turnover of more than $50m, by 2026-27.