Company tax cuts on hold for businesses with turnover above $50 million

Updated

The Federal Government has conceded it cannot convince the Senate this week to make more cuts to company tax.

Key points: Finance Minister says Government remains committed to its plan, will try again when Parliament resumes after winter break

Government needs more time to negotiate with Senate crossbenchers who are so far refusing to back the full plan

Minister took a swipe at Bill Shorten over Labor's plan to repeal existing cuts, labelling upcoming by-elections a referendum on tax

Finance Minister Mathias Cormann said the Government would try again when Parliament resumes in August to pass tax cuts for businesses with turnover above $50 million.

"Despite our best efforts to secure majority support in the Senate for our proposed business tax cuts, we have not yet been able to secure the necessary support," Senator Cormann said.

The Government is four votes short of the number it needs to reduce the company tax rate for larger businesses.

In Question Time, Federal Labor demanded to know if the Government had struck a secret deal with One Nation to delay the company tax cut vote until after the by-elections.

Prime Minister Malcolm Turnbull responded that "we never discuss negotiations with the crossbench".

"We have found that the most important thing to do when negotiating with other members of Parliament is to treat them with respect and that is what we do," Mr Turnbull said.

Labor leader Bill Shorten said Mr Turnbull should have "come clean in Question Time" about whether he and Senator Hanson had "done a dodgy secret deal to vote for massive tax cuts for the big banks after the by-elections?".

Mr Turnbull taunted the Opposition about tensions over Mr Shorten's plan to increase tax on companies with turnover of between $10 and $50 million.

Mr Turnbull told Parliament that Shadow Treasurer Chris Bowen had failed to defend Mr Shorten's position during an interview this morning.

Labor backbencher Gai Brodtmann today also avoided endorsing the plan to lift taxes on those medium-sized businesses.

'We need more time to make our arguments'

Yesterday Labor backbencher Ross Hart repeatedly avoided endorsing the policy before eventually saying he agreed with the decision.

Amid the Labor disquiet, the Government has also been unable to deliver on its company tax plans.

Last week Mr Turnbull said the company tax cuts would be put to a vote in the Senate this week.

But today, the last sitting day before the Parliament leaves for its winter break, Senator Cormann said it would be deferred so negotiations could continue.

"We need more time to make our arguments to our colleagues on the Senate crossbench," Senator Cormann said.

He moved to put pressure on the two One Nation senators who are not backing the full company tax cut plan.

Senator Cormann pointed to recent opinion polls showing that more than 60 per cent of One Nation voters in the Queensland seat of Longman supported the full company tax cut plan.

"More One Nation voters in Longman are supporting a lower, globally more competitive business tax rate than Liberal voters," he said.

He insisted the Government was still fully committed to its company tax cut plan.

Senator Cormann declared the five upcoming by-elections a referendum on which party has the better economic plan.

He took a swipe ar Mr Shorten's decision to announce Labor would repeal the existing cuts.

"You have an opportunity to send Bill Shorten a message. If you do not support his plan for higher taxes that will make you worse off, vote for the Liberal candidate in Braddon and in Longman," Senator Cormann said.

Despite calling it a referendum, Senator Cormann said the Government would still try again to pass the cuts even if Labor won the by-elections.

Topics: government-and-politics, tax, federal-government, federal-parliament, small-business, multinationals, company-news, business-economics-and-finance, australia

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