Turnbull reverts to Plan B after company tax bid doomed

Cabinet will now consider fast-tracking existing company tax cuts for small and medium businesses.

“The government gave Pauline Hanson and One Nation every opportunity to support lower taxes for Australian businesses without supporting tax cuts for the big banks,” the Treasurer said. Picture: Kym Smith

Cabinet will consider fast-tracking existing company tax cuts for small and medium businesses after the government offered to carve out the big four banks in a failed last-ditch bid to win Pauline ­Hanson’s support for cuts for business turning over more than $50 million.

The Senate was last night set to vote down the full enterprise tax plan, delivering another blow to Malcolm Turnbull, but Labor ­decided to drag out the debate. A vote on the remaining tax cuts is now expected today.

Finance Minister Mathias Cormann failed to win over One ­Nation to legislate company tax cuts for big businesses after offering to exclude the Commonwealth Bank, ANZ, Westpac and NAB — deposit-taking institutions with ­liabilities above $500 billion — from receiving the lower, 25 per cent tax rate. But Macquarie Bank and other big and medium businesses would still be eligible for the cut from 2026-27, under the government’s revised plan. Without the Senate’s support, the company tax rate for all businesses with an annual turnover above $50m is set to remain at 30 per cent.

Scott Morrison accused Senator Hanson of casting the economy, businesses and workers adrift as Labor, which also rejects the full tax plan, had done.

“The government gave Pauline Hanson and One Nation every ­opportunity to support lower taxes for Australian businesses without supporting tax cuts for the big banks,” the Treasurer said.

“Pauline Hanson’s decision to vote for higher taxes regardless, will be a big disappointment to all those businesses especially in ­regional Australia that would benefit from the change. Instead of ­encouraging businesses to invest, create more jobs and pay their workers higher wages, One ­Nation has voted for every single business, except the banks, with a turnover above $50m to pay more of what they earn to Canberra.”

Cabinet was preparing to look at speeding up the rollout of existing company tax cuts as early as last night as it conceded defeat in passing the big-business tax cuts.

A majority of Senate crossbenchers supports the move, as do Coalition MPs who want the government to move on from the company tax cuts policy ahead of the next election.

The Australian understands the fast-tracking of existing company tax cuts would not require new legislation but be introduced as an amendment to the enterprise tax plan bill after being put to the ­Coalition partyroom.

Senator Hanson yesterday ­reaffirmed she and colleague Peter Georgiou would not support the government’s remaining company tax cuts, insisting Australia “can’t afford” a lower rate for big business. She said she had asked the government to impose a royalty on companies that owned commonwealth gas leases and for the banking royal commission to be paid for by the banks in ­exchange for her support.

Centre Alliance was scheduled to meet Senator Cormann yesterday but the meeting was postponed. The two senators had a number of demands in return for their support.