One Nation leader Pauline Hanson withdraws support from Coalition's company tax cuts

Updated

One Nation leader Pauline Hanson has dealt a blow to the Federal Government by withdrawing her party's support for the Coalition's company tax cuts.

Key points: Pauline Hanson struck a deal with the Coalition in March to support tax cuts in exchange for an apprenticeship pilot program

Now she says no money has been put aside, and is effectively withdrawing support

Finance Minister Mathias Cormann said the apprenticeship scheme was always conditional on the tax cuts passing

Senator Hanson said she regretted pulling out of a deal with the Government, but it had failed to deliver on a string of her demands, including reducing the immigration rate, building a coal-fired power plant in north Queensland and lowering spending.

She said she had not spoken to Finance Minister Mathias Cormann directly about her new position.

"I know he is devastated over this, but it is not Minister Cormann, it is his colleagues and the Government that have let him down," Senator Hanson said.

Senator Cormann is pessimistic that the Government will ever reach a deal with One Nation on cutting the company tax rate.

"It looks that we might not ever get to that point," Senator Cormann said.

Senator Hanson struck a deal with the Coalition in March to support the tax cuts in exchange for an apprenticeship pilot program for young Australians.

But the One Nation leader — who controls three votes in the Senate — says no money has been put aside for the program.

There appears to be a major dispute between Senator Hanson and the Government over the timing of what was agreed.

While Senator Hanson said no money had been set aside, Senator Cormann said the apprenticeship scheme was always conditional on the tax cuts passing.

"It was always understood and accepted by Pauline Hanson and One Nation that the things we agreed were conditional on the successful passage of the legislation in full, to reduce the business tax rate over time for all businesses down to 25 per cent and that remains the Government's position," Senator Cormann said.

He said One Nation had given firm private and public commitments that they would support the company tax cuts legislation when they negotiated earlier this year.

"I am obviously very disappointed with this latest development, but self-evidently I hope this is not the last word," Senator Cormann said.

One Nation's latest position makes it even harder for the Government to get the company tax cuts through Parliament before the next election

Senator Cormann told a Senate estimates committee the Government was committed to taking the company tax cut to the next election.

"Yes and I can explain why because it is even more important now than it was when we took it to the 2016 election," he said.

Hanson wants lower immigration in exchange for support

Senator Hanson now says the Federal Government has not done enough to reduce debt, and the company tax cuts would not create enough jobs in the short term.

She is also listing other major changes she wants the Government to make.

In an interview with The Australian, Senator Hanson reiterated her party's support for changing the petroleum resource rent tax, to make large companies pay more tax.

Senator Hanson's change of mind presents a headache for the Federal Government, which has failed to convince enough crossbench to support the change.

It wanted to pass the legislation before the budget, but was forced to defer debate with new independent senator Tim Storer unconvinced.

The two Centre Alliance senators (formerly the Nick Xenophon Team) are also unprepared to back the company tax cuts now.

CA senator Stirling Griff said the evidence so far "certainly would indicate to us that it's not really the right time to have tax cuts or corporate tax cuts".

Topics: federal-government, federal-parliament, nationals, one-nation, tax, law-crime-and-justice, pauline-hanson, business-economics-and-finance, government-and-politics, australia

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