Companies with a turnover of up to $50m will receive a tax cut taking the rate from 30% to 25% after the Turnbull government struck a deal with the Nick Xenophon Team in return for a promised $260m worth of one-off payments for pensioners.

The pension promise amounts to $75 for a single person and $125 for a couple for those on the aged pension, the disability support pension and the parenting payment. The payment was negotiated to cover energy costs, but it is unclear how it will be funded.

The tax cut will be staggered, with an immediate cut in 2016-17 for companies with a turnover up to $10m, followed by a cut for companies up to $25m in 2017-18 and $50m in 2018-19.

The business tax cuts will cost the budget $5.2bn over four years and $24bn over the medium term. But the cost represents a saving to government on the current budget, given the original 2016 corporate tax cut package was to cost close to $50bn.



The Senate refused to support tax cuts for larger companies, which were to be delivered over 10 years.

Malcolm Turnbull, treasurer Scott Morrison and finance minister Mathias Cormann appeared in a joint media conference at 7pm on Friday to hail the changes as a “great day for Australian workers and Australian businesses”.

Turnbull said he remained fully committed to the whole 10-year tax plan, given the Senate supported only the lower end of the tax package.

“This is a great result for 6.5 million Australians working for businesses that will get the benefit of this tax cut,” Turnbull said.



Cormann promised the arrangements for the pension payments would be made in May’s budget. “The pension payment is a firm commitment that we have made,” he said.

Earlier, Cormann announced the deal in the Senate, thanking the the crossbenchers including Xenophon, One Nation and Derryn Hinch.

Xenophon also negotiated a number of energy measures, including fast-tracking a solar-thermal plant in South Australia already promised, a study of a gas pipeline connecting the state with the Northern Territory, and a new national energy policy.

Business groups including the Australian Industry Group and the Business Council of Australia immediately welcomed the deal, though they reminded the government not to walk away from providing the cut to larger businesses as well.

“It is now imperative that parliament continue negotiating the full passage of the enterprise tax plan, which should remain in the budget as the only policy on the table to revive the economy with better jobs and higher incomes,” Jennifer Westacott, the chief executive of the Business Council of Australia, said. “There is no plan B to get the economy moving again.”

Labor and the Greens poured scorn on the deal. Labor senator Sam Dastyari said it was a joke for a government that went “on and on” about the challenges of budget fiscal responsibility. “The deal is for what? A bunch of reviews? A look at some initiatives, a few things the government had to do anyway to address the issues in South Australia,” Dastyari said.

“For the government to come here with a cash splash payment. You are literally buying votes now.

“There may be a case for those who are struggling on pensions to be able to address their energy costs, but policy should not be set with dirty deals in the corridors of parliament in the middle of the night because you are a government that has lost your agenda.”

Having extended the Senate sitting by filibustering while negotiations continued, the leader of the government in the Senate, George Brandis, criticised the opposition parties for artificially prolonging the debate, drawing howls from the opposition benches.



The resolution came after the parliamentary sitting was extended to deal with the government’s amendments to section 18C of the Racial Discrimination Act and the $50bn company tax cut package, first unveiled in the 2016 budget.

The government needed the package passed on what was the last sitting opportunity before budget week in May.



The Senate sat until midnight on Thursday and until midday on Friday to debate 18C – even though the government knew it did not have the numbers to amend it by removing “insult” and “offend” and inserting the term “harass”.

However, changes to the complaints process at the Human Rights Commission passed the Senate by midday on Friday.

The amended 18C process bill then went back to the lower house, which had been kept back in conjunction with the Senate.

But the lower house adjourned after the 18C process bill was passed and Morrison explained the government did not need to keep the lower house sitting for the company tax bill.



He told media just after 3pm that the Australian Taxation Office advised it was not necessary for the lower house pass a bill immediately if it was approved by the Senate for any tax cuts to be passed on after the next budget.

The company tax cut debate resumed from there as the government went into intense negotiations with the crossbench. During that time, Labor and the Greens refused to speak on the bill and tried a number of times to adjourn the debate.

The numbers in the Senate constantly dropped below a quorum, so senators were repeatedly called back to the chamber by the bells to ensure the debate could continue.

With Labor and the Greens opposed to the company tax cuts, the government had to rely on the Xenophon Team, which favoured a $10m turnover cap, and One Nation and Hinch, who favoured $50m.

Bill Shorten accused the government of wasting taxpayers’ money by keeping the parliament sitting as it could have shortened the 18C debate and sent members home on time. “This mob is bloody hopeless,” he said. “They’re keeping Australian taxpayers, spending their money as this government tries to do its day job.

“This is a massive waste of time, of taxpayer money.”

Shadow treasurer Chris Bowen said Labor had held a consistent policy on corporate tax since the 2016 budget, supporting a tax cut from 30% to 27.5% for small businesses with a turnover up to $2m.



Hinch said he agreed with a $50m turnover cap because businesses like the fifth-generation family engineering company Furphys would not get the tax cut if the cap was at $10m. He said that company, which provided the original water cart to the army at Gallipoli, employed 150 people and deserved a tax cut.



Jacqui Lambie argued that companies – including multinationals – did not need any more help with tax cuts and said the big four banks would receive $7.4bn in revenue if the Coalition’s package went through.

“So much for looking after our own backyard first,” Lambie said “We are giving away resources to the world’s largest oil companies for free while we struggle to keep the lights on. How about that? That is an absolute disgrace and a national tragedy itself.

“But unlike our own, other governments have been smarter. Through state owned companies they have invested in Australian gas resources.”

