One Nation, which has three Senators, supported the previous legislation which granted a tax cut to companies with turnovers capped at $50 million but would not be supporting the remainder of the package.

"Does (Senator Bernardi) realise a lower tax rate equals lower franking credits and less money in the hands of self-funded retirees and those saving for the future?," Senator Hanson said.

"One Nation has already supported tax rate cuts for businesses with a turnover of up to $50 million, but I draw the line at that. What we need are incentives for businesses to invest in Australia and tax rate cuts are not the answer."

She dismissed comparisons with the US where the company tax rate has just been slashed to 21 per cent.

"A tax rate comparison between countries is ridiculous when the new system in America restricts deductions but in Australia deductions are unlimited," she said.

"The new company tax system in America provides huge incentives in terms of capital write-offs to encourage things to be made in America."

Wrapping up debate just before the lower house passed the legislation by 75 votes to 71 votes, Treasurer Scott Morrison rounded on Labor which, when in government, supported company tax cuts.

He said Labor would "create a glass ceiling on business growth" and must "own the consequences of its decision".


"Whether they changed their mind, whether they ever believed it in the first place, whether they lost their way, I'll let the Australian people decide."

"We're sticking with this plan because we know it's in the economic interests of Australia," he said, adding it would lead to more and better paid jobs.

Senator Hanson disagreed with the suggestion that failure to lower business income tax rates would render Australia uncompetitive.

"Foreign-owned multinationals don't consider corporate income tax rates in their investment decisions, because they don't expect to pay any tax in Australia," she said.

"It is just too easy to contrive a paper loss or a non-taxable income. Lowering business income tax rates will not make Australia an attractive destination for investment unless government delivers globally competitive electricity and gas prices.

"We also need labour reform. We have a $600 billion debt and no prospect of paying it back because this government and the previous Labor government have no appetite to collect tax from foreign-owned multinationals which often pay more in political donations than they do in corporate income tax."