Liberals push on with big business tax cuts, despite internal disquiet following by-election defeats

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Sorry, this video has expired Video: Mathias Cormann insists the Government will persist with company tax cuts (ABC News)

Labor's success in the federal by-elections is prompting debate within the Coalition about whether its policy to cut corporate taxes for big businesses should be dumped or changed.

Key points: Some within the Coalition are questioning the company tax plan, but Mathias Cormann has rejected suggestions it should be softened

Bill Shorten attributed some of Labor's success at weekend's by-elections to public opposition to corporate tax cuts

Government remains committed to bringing the legislation to a vote when Parliament resumes

The Opposition retained all of its seats at the weekend polls and the Liberal National Party's primary vote plummeted to a perilously low level in the marginal Queensland seat of Longman.

There were several factors behind the by-election results, but Labor campaigned heavily against the tax cuts, arguing the money would be better spent on health and education.

Finance Minister Mathias Cormann has rejected suggestions the plan should be softened given how unpopular a policy benefitting the major banks and multinational corporations has proved to be.

"It's very important we protect all businesses across Australia from the impact of lower business tax rates in other parts of the world," Senator Cormann told AM.

"Of course at every election we consider carefully what the people have told us … but when it comes to the central components of our plan for a stronger economy and more jobs, we remain absolutely and totally focused."

While Labor leader Bill Shorten opposes the next round of tax cuts for big businesses, he has also declared that if the Prime Minister scraps the plan then he should resign.

"If Mr Turnbull drops his corporate tax cuts for the big end of town, then he should go with them," he said.

"I thought they were always a silly idea, he has made it his signature economic policy.

"If he hasn't even got the intestinal fortitude to support his own economic values, what he really believes, then he shouldn't hang around either."

'We have become the defenders of the big banks'

The Coalition has already successfully legislated for the tax rate for businesses with a turnover of less than $50 million a year to gradually drop from 30 per cent to 25 per cent.

It wants that extended to all businesses, but it has been opposed by Labor and some of the minor parties and crossbench senators.

Mr Shorten attributed some of Labor's success at the by-elections to the Coalition's policy.

"The reason why we could offer promises in health care, in school funding and looking after people's jobs is because we're not giving tens of billions of dollars away to big banks and big corporations," he said.

That has some in the Coalition ranks questioning the value of pursuing the plan.

One Coalition figure said rather than trying to push the plan through the Senate again, the Government should cauterise the problem.

"We have become the defenders of the big banks. We protected them from the royal commission, want to give them tax cuts," he said.

"If you are on the bones of your arse in Caboolture or Morayfield you are going to hate the banks. Labor has framed us as the bankers' party rather than the customers' party."

This person believes the tax cuts planned for Australia's biggest corporates should be dumped, replaced by greater and faster tax cuts to small and medium-sized businesses.

Former Prime Minister Tony Abbott told 2GB there are no votes in company tax cuts "because what the public want is money in their pocket directly not indirectly".

Mr Abbott said while he did not think it changes votes, he accepted the economic argument for lowering the tax rates.

But he said that meant it should be done sooner, not phased in over time.

"There's no point saying let's have tax cuts in six years' time, if tax cuts are worth doing, they are worth doing now."

Parliament resumes sitting in two weeks' time after a lengthy winter break and despite the concerns, the corporate tax cuts remain the Coalition's top priority.

"Our intention would be to bring the legislation on for a vote in the next sitting fortnight," said Senator Cormann, the Leader of the Government in the Senate.

He has flagged his intention to bring on a vote even if the Government cannot secure enough votes in the Senate for it to pass.

"It is certainly time now for the Senate to pass judgement in relation to this very important economic reform," he said.

Even if it fails to pass, Senator Cormann said the Coalition would stand by the plan and take it to the next election.

"We are absolutely committed to this plan. It's critically important."

Longman result 'a big structural shift'

The disquiet in Coalition ranks stems from the poor polling results in the marginal seat of Longman.

Prime Minister Malcolm Turnbull insists there is nothing to worry about, given the swing against the LNP was limited to 3.7 per cent.

Sorry, this video has expired Video: Malcolm Turnbull plays down Super Saturday results (ABC News)

"This swing in Longman is very much an average swing," he said.

"There is nothing remarkable about it at all. At all."

However, the LNP's primary vote collapsed to just 29.6 per cent, a swing against the candidate Trevor Ruthenberg of almost 10 per cent.

Labor's Susan Lamb was re-elected with 40.0 per cent of the vote.

One Nation candidate Matthew Stephen garnered 15.9 per cent of the vote, a 6.5 per cent swing to the party.

Labor Party President Wayne Swan said the results were a sign voters were choosing Pauline Hanson's One Nation ahead of the LNP in Queensland.

"We've got a primary vote with a four in front of it, the Liberals have a primary vote with a two in front of it."

"That is a big structural shift."

If that result was replicated in other Queensland seats at the next election, which is due early next year, it would make it impossible for the Coalition to win.

President of the Federal Liberal Party, Nick Greiner, conceded the result was disappointing.

"Cleary a primary vote at that level isn't satisfactory and isn't a level at which the LNP in Queensland would be remotely happy with," he said on the National Wrap.

"It's not for the [Liberal Party] organisation to tell the parliamentary party … but of course they will look at their policies and they will look at their marketing."

Topics: tax, government-and-politics, liberals, liberal-national-party, political-parties, turnbull-malcolm, royal-commissions, australia

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