Coalition moves to carve out the big four banks from the plan but fails to win One Nation support

This article is more than 2 years old

This article is more than 2 years old

The One Nation leader, Pauline Hanson, missed a vote that could have killed off the government’s corporate tax cuts, despite publicly pledging her opposition to the plan this morning.

The Coalition made a last-ditch attempt to win One Nation’s support late on Monday. It made amendments that would carve out the big four banks from the plan, denying them the tax cut offered to the rest of corporate Australia.

But the changes failed to win the crucial support of One Nation, who reaffirmed their complete opposition to the company tax plan on Tuesday. The One Nation senator Peter Georgiou said the party had received no detailed proposal on the banks from the government.

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“Let me be clear, we do not support the proposed company tax cuts nor any of the proposed amendments,” Georgiou said. “One Nation has never received any draft legislation from [the government] with any kind of detail where the big banks would be carved out from company tax cuts.”

Ironically, it was One Nation that helped keep the bill alive on Tuesday. Georgiou voted against the bill, but his leader abstained. The government won the vote 35-34. Had it tied, the bill would have been dead.

Hanson this morning refused to support the plan, and talked down any notion of having done a deal with the Coalition to carve out the banks. Guardian Australia contacted her office for an explanation of the abstention. A spokesman said only that her position had not changed.

There is no indication at this stage that One Nation has done a deal with the government, and the bill can still be defeated later on Tuesday, after the amendments have been debated.

Pauline Hanson 🇦🇺 (@PaulineHansonOz) MEDIA RELEASE | Company Tax Cuts - No Deal #auspol



LINK: https://t.co/mYSQfdnabo pic.twitter.com/akvuvRABuf

The Labor senator Murray Watt said Hanson must now kill off the bill.

“Senator Hanson’s failure or abstention to vote meant the government got this legislation through at the second reading stage, and that’s why we’re continuing to debate on it now,” Watt said.

“No one seems very clear about what Senator Hanson’s actions were based on … but whether it was accidental or deliberate, her absence from that vote allowed the government to succeed in passing this bill at the second reading stage and has given new life to the possibility of these company tax cuts going through.”

Senator Murray Watt (@MurrayWatt) Pauline Hanson just missed the vote on company tax cuts, meaning it passed 2nd reading stage. Now in committee. She must now make amends, by voting against them, at 3rd reading stage, to kill them off. https://t.co/1hymXh7C9k

The government’s plan to carve out the big banks is likely to anger the industry and further destabilise relations, which were already fraught due to the royal commission.

It is proposing to exclude banks with assets worth more than $500bn. The finance minister, Mathias Cormann, said it was a necessary compromise.

“In the interests in a compromise, the government is willing to move these amendments to exclude the … big four banks to accessing the reduced company tax rate,” he said on Tuesday.

The crossbench senator Derryn Hinch wants a cap that would give the tax cut to businesses with a turnover below $500m.

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Cormann said that was simply not feasible. He said it would create a “perverse incentive” for businesses to keep their turnover below $500m in order to retain a lower tax rate. He also said it would permanently lock-in a higher tax rate for such businesses, which any future government would struggle to change.

“If we now locked-in a $500m cap, we would never, ever revisit it,” Cormann said. “It would be absolutely impossible for us to say to the public ‘we want you to now just support a tax cut ... just for businesses with a turnover of $500m’.

“The practical effect is that we would be locking in ... a 5% higher tax rates for businesses with a turnover of more than $500m.

“In the interests of a compromise, the government is willing to move these amendments to exclude the … big four banks to accessing the reduced company tax rate.”

Cormann challenged Labor to now support the amended bill.

“If it’s all about the big four banks, no doubt you will vote in favour of these amendments and then vote in favour of the legislations as a whole,” Cormann says.