One Nation leader Pauline Hanson in Parliament on Wednesday. Credit:Alex Ellinghausen “We believe in aspiration. We’re not mystified by it like the Labor Party is. We recognise it, we embrace it and our tax plan will empower it,” he said. Opposition Leader Bill Shorten warned voters against trusting the government promises when the tax cuts took seven years to take effect, compared to a swifter increase in Labor’s alternative tax cuts over the next four years. Illustration: Matt Golding “This is a government who’s making promises they can’t afford based upon forecasts they can’t possibly justify – it’s a silly political game,” Mr Shorten said.

The government is said to be confident it can pass the entire tax package on Thursday, but observers cautioned that Senator Hanson had changed her mind on company tax cuts twice already this year. Those close to the Senate negotiations yesterday said the One Nation leader was showing the strain from the splintering of her party in the upper house and would come under even greater pressure if she voted against the tax cuts. “Pauline’s going to go with the government,” said one person familiar with the discussions, while a second source outside the government said private discussions had signalled the same outcome. “They know it would not go down well for them to deny tax cuts to the people who voted for them – the tradies out there, the middle Australians,” said a third source. The tax plan consists of three phases, with a $22 billion package starting from July this year, another $80 billion component starting from July 2022 and a final $42 billion element starting from July 2024.

Loading Replay Replay video Play video Play video The government calculates its plan delivers bigger benefits than Labor for workers earning more than $75,000 today when the gains are measured over seven years. Labor claims the gains are greater for all workers earning up to $120,000 under its plan when measured over four years. Finance Minister Mathias Cormann has negotiated support in the Senate from David Leyonhjelm of the Liberal Democratic Party, Cory Bernardi of the Australian Conservatives, Brian Burston of the United Australia Party and Fraser Anning of Katter’s Australian Party. Loading

Labor stepped up its attempts to amend or block the bill, urging two Centre Alliance senators, Rex Patrick and Stirling Griff, to reject the government’s agenda. Senator Patrick has previously said he would not block the entire package but Senator Griff told Fairfax Media the final decision would be made at the final vote. “If it bounces back and it’s all or nothing, we would not want to see lower to middle income earners miss out,” he said. “We will decide which way we go on the floor.” Senator Hanson and her colleague Peter Georgiou are the crucial swing votes on the bill, with their numbers adding to the Coalition and other crossbenchers to give the government a notional 40 votes out of 76 in the upper house. Labor secured an amendment to the government bill on Wednesday to remove the third stage of the tax cuts, succeeding with a vote that was tied at 34-34, Senator Cormann made it clear the government would reject this change in the House of Representatives.

The government intends to send the bill back to the Senate in its original form on Thursday for an “all or nothing” vote on the entire plan. Senator Hanson criticised Labor for opposing the second stage of the tax plan, which includes an increase in the $37,000 tax threshold to $41,000 and an increase in the $90,000 tax threshold $120,000. “These are your voters,” she told Labor in the Senate. “Yet you are denying those people you are supposed to support – the battlers.” Senator Hanson cited the wages of “tradies” and others who earn salaries of more than $90,000 and will miss out under Labor, saying they deserved a tax cut when politicians were getting an increase in their salaries at the expense of taxpayers. The One Nation leader also spoke in support of the third stage of the tax reform, which sets a single rate of 32.5 per cent on all earnings between $41,000 and $200,000.