PM signals no shift on business tax cuts

The Turnbull government may only get Senate support for a corporate tax rate cut for small business at this stage, but it is unlikely the rest of its 10-year plan will be completely ditched.


Prime Minister Malcolm Turnbull told The Weekend Australian newspaper his government is “absolutely committed” to one if its core economic policies, warning jobs would be lost and companies would leave the country if the tax rate remains uncompetitive at 30 per cent.

Treasurer Scott Morrison wants the tax package dealt with before parliament rises at the end of this week for the last time before the May 9 budget.

The lower house, where the government has a slim majority, is expected to pass the legislation on Monday to reduce the business tax rate for small firms with a turnover of less than $10 million to 27.5 per cent and then gradually get to a 25 per cent rate for all businesses by 2026/27.

Labor objects to the plan, other than reducing the rate for businesses with a turnover less than $2 million.

Opposition finance spokesman Jim Chalmers doesn’t know where the $50 billion plan is heading, describing it as a “typical Turnbull government shambles”.

“If they don’t keep the tax cuts in the budget, it would be pretty hard for them to keep the treasurer in his current role after the budget,” Dr Chalmers told ABC television on Sunday.

Even so, Mr Morrison believes it will be a “massive achievement” if the government can get Senate support for small business tax cuts, saying it would be the biggest change for the sector in a long time.

Crossbench senator Derryn Hinch, a crucial vote in the upper house where the government doesn’t have a majority, expects the government will split the bill “to get something through this time” and come back to the broader cuts later.

The coalition may need to compromise on proposed changes to the Racial Discrimination Act and the handling of vilification complaints by the Australian Human Rights Commission.

The draft laws are expected to come on for debate shortly after an inquiry report is tabled on Tuesday.

However, while the AHRC process changes are widely supported, the government may narrowly fall short of crossbench support for changing the wording of Section 18C of the Act from “offend, insult and humiliate” to “harass and intimidate”.

The AHRC and Law Council say the existing Act has worked well but acknowledge processes could be improved to ensure greater fairness for people lodging complaints and those complained against.

With the Hazelwood coal-fired power plant due to shut in regional Victorian this week, electricity prices and reliability issues are again expected to dominate question time.

Adding to the debate will be a Senate committee report on the closure of electricity generators due to be tabled on Wednesday.