"We're not splitting the bill, we're not splitting the bill, we're not splitting the bill, we're not doing it," Treasurer Scott Morrison said.

Malcolm Turnbull told Parliament the amendment would be rejected and sent back because "we want all Australians to get the benefit of a comprehensive tax reform".

One Nation and Centre Alliance declined to comment on what they would do today but both suggested they would now most probably vote for the package in full. The government needs the votes of both parties.

"We don't want to see low-to-middle-income earners miss out on tax relief so that will weigh heavily on our decision," said Centre Alliance senator Stirling Griff.

Treasurer Scott Morrison said the government would not be separating its tax cut package and it was all or nothing. Alex Ellinghausen / Fairfax Media

Labor supports only stage one of the tax plan and has vowed that if elected, it will bolster the stage one tax cuts by 75 per cent and repeal stages two and three.

Liberal MPs were relishing the prospect of a fight with Labor over income tax cuts, with one saying it was much preferred over a fight over company tax cuts, the legislation for which the government will try to pass next week but faces a much tougher task.

At the cost of about $20 billion, stage one, which begins on July 1, is worth about $530 a year to low-and-middle-income earners.


Stage two begins on July 1, 2022 and will take the $90,000 threshold under which the 37 per cent tax rate applies to $120,000, meaning everyone under that income will pay a maximum 32.5¢ in the dollar.

If Senator Pauline Hanson comes on board, the government will have the numbers to pass all three stages at once. Alex Ellinghausen / Fairfax Media

Stage three begins on July 1, 2024. It will abolish the 37 per cent bracket and apply 32.5 per cent to all earnings between $41,000 and $200,000. The rate above $200,000 will stay at 45 per cent, which currently applies to earnings over $180,000.

Already under attack from the government for wanting to deny tax cuts to aspirational workers, Labor was also set upon on Wednesday by One Nation leader Pauline Hanson as she hinted she would be supporting the full package, despite having concerns about its long-term affordability.

"Do I need to remind Labor that tens of hundreds of electricians, plumbers, nurses, secondary school teachers, lift mechanics, and welders earn more than $90,000 and will miss out on a permanent tax cut if Labor opposes stage two of the proposed personal income tax plan?" she said.

"The average backbench politician on $200,000 will receive an extra $4000 but many will get much more because their salaries are much higher than $200,000.

"Aspiration comes in all shapes and sizes. It's a legitimate aspiration to want to make more money. That's entirely legitimate and very important," Labor leader Bill Shorten said. Alex Ellinghausen

"How can Labor deny these tax cuts to hundreds of thousands of hard-working Australians on taxable incomes from $120,000 up to $200,000 when they have accepted pay rises in excess of 6 per cent in recent times?"


Stage two is worth $80 billion over a decade and stage three worth more than $40 billion. Labor leader Bill Shorten argued that the money was needed for essential services as he shot back at Senator Hanson for siding with the government.

"Pauline, remember who voted for you. You're meant to be the champion of Queensland battlers – 1.9 million Queensland battlers will be better off under Labor's tax plan than the government's," he said.

"It seems that now she's come to Canberra, she's forgotten who put her there and that's a recipe for disaster. I say to Senator Hanson, back the battlers, Labor will."

Mr Turnbull went after Labor for wanting to repeal tax cuts for people on $90,000 and over.

"The Labor Party sneer because they are smug in their big taxpayer funded salaries. Let me tell you: in the real world, 90 per cent of Australians work for the private sector and they want to be encouraged, they want to be supported.

"Aspiration isn't a mystery to them; it's what drives our nation."

Mr Shorten rejected suggestions that Labor's income tax stance was anti-aspirational.

"Aspiration comes in all shapes and sizes. It's a legitimate aspiration to want to make more money. That's entirely legitimate and very important," he said.


"But there are aspirations that go beyond that. I've got an aspiration to see aged care properly funded. Aspiration can be for parents who want their kids to get an apprenticeship.

Senator Hanson did repeat she would not be supporting any more of the company tax cuts which, unless she changes her mind again, would kill them off. She did leave open that possibility.

She slammed both sides for what she claimed was not doing enough to clamp down in multinational tax avoidance.

"If citizens want a more equitable and fairer society then multinationals need to pay a fairer share of tax," she said.

"I supported company tax cuts for businesses with turnovers up to $50 million but I will not support further tax cuts for business until the government repairs the budget with a new tax base fro multinational companies,' she said.