The Federal Government has dumped its contentious plan to slash taxes for big businesses, after it failed to secure the support of an unconvinced Senate crossbench.

Key points: Plans to slash tax for large companies by 5 per cent fail to pass Senate

Plans to slash tax for large companies by 5 per cent fail to pass Senate Bill has proved a major stumbling block for Turnbull Government

Bill has proved a major stumbling block for Turnbull Government Turnbull says he will not take the plan to the next election

The Prime Minister Malcolm Turnbull announced the move at a press conference this afternoon, revealing the Coalition would not take the tax policy to the next federal election.

"We have to recognise in this and all contexts, the iron laws of arithmetic, and we have not been able to secure the support of the Senate," Mr Turnbull said.

"I think the truth is the political climate that used to have a broad bipartisan consensus … while that consensus used to be there, it is there no longer, and there is a lot more work that needs to be done."

While cuts for businesses with an annual turnover of up to $50 million have already passed Parliament, draft laws slashing the tax rate from 30 to 25 per cent for companies that turnover more than that have been stuck in the Senate for months.

With both Labor and the Greens opposing the legislation, the Coalition needed the support of the two One Nation senators, and two others, to get its bill through — but failed to get it.

The legislation was voted down this morning, all but killing the legislation — before the Government turned off its life support.

"Can I say to you that we have delivered on our platform that we took to the election, that the larger end of the company tax cuts is one part that we couldn't get through the Senate," Mr Turnbull said.

"But we have got so much more through this Parliament than anyone imagined."

Finance Minister Mathias Cormann said he was disappointed the Government did not have the support to pass the bill.

"It is fair to say and I think nobody in the Senate would question that we did everything we could to secure the passage of that legislation, we truly left no stone unturned," Senator Cormann said.

"I'm personally disappointed that we failed to secure the necessary support, but it is, of course, now important to pragmatically take stock of where we are and make judgements about the best direction for the future."

One Nation rejects offer to sweeten deal

Pauline Hanson believed the tax cuts did not have public support. ( ABC News: Matt Roberts )

In the lead-up to the vote, Pauline Hanson's stance on the matter was difficult to figure out, changing several times during negotiations with the Government.

And with the legislation heading for defeat in the Senate, Mathias Cormann once again dangled a carrot to win One Nation's support — an amendment excluding the big four banks from the legislation.

"In the interest of a compromise, the government is willing to move these amendments to exclude the large authorised deposit-taking institutions — the big four banks — from accessing the reduced company tax rate," Senator Cormann said.

But when it came to the vote on the day that mattered, both One Nation senators moved against the legislation.

Pauline Hanson told the Senate the proposed cuts didn't have the public's backing.

"I will not support this," she said.

"I'm getting criticised for it, but as more comes out and the public are aware of what cost it's going to be to this company, and future generations, a lot more people are saying 'no' — they don't want these corporate tax cuts."

Shadow treasurer Chris Bowen seized on Labor's senate victory after the vote.

"Well just as the Turnbull Government's imploding, so does the Turnbull Government's economic agenda collapse," Mr Bowen said.

"Malcolm Turnbull had a one-point plan for the Australian economy, he had no plan B.

"The Parliament has today spoken and defeated his one point plan."

On Tuesday, Senator Cormann indicated the Government would one day come back to the plan — regardless of the vote.

"If the Senate votes this proposal for a lower, globally more-competitive business tax rate down today, the moment will come when this Parliament will have to revisit this proposal, because this is not only important for Australians today, this is important for future generations of Australians," Senator.

But as Pauline Hanson showed in the lead-up to the vote — a day, not a week, is a long time in politics.