The Turnbull government is a step closer to winning Senate support for its politically unpopular big business tax cut, securing the vote of the newly arrived Tasmanian senator, Steve Martin, and a public commitment from big business that it will invest more over time if the measure passes the parliament.
With Senate debate under way this week, the government has launched a major duchessing effort, backed by business groups, to convince crossbenchers to support a reduction in the company tax rate from 30% to 25% by 2026-27.
Courtesy of Martin’s decision to support the package, it now has four crossbench votes. Cory Bernardi, David Leyonhjelm and the former One Nation representative Fraser Anning are already in the yes column.
On Tuesday, Pauline Hanson and Derryn Hinch confirmed they were also at the negotiating table. Both Hanson and Hinch want assurances that there will be a quid pro quo for workers if the big business tax cut passes.
With Hanson and Hinch clearly in mind, the Business Council of Australia issued a public statement signed by Australia’s biggest companies on Wednesday afternoon indicating business would invest in Australia “as the tax cut takes effect” – which is over a period of 10 years.
Some of Australia’s biggest employers have committed to investing more in Australia with a more competitive tax rate #auspol pic.twitter.com/M1nac5qGBJ
— The Business Council (@BCAcomau) March 21, 2018
Less than a month ago, Hanson said she was opposed to a big business tax cut, but the One Nation leader has signalled she is now positively disposed to the change in the event companies give something back to workers.
Hinch, in response to the BCA’s public commitment about investment, said he was not yet persuaded. The Victorian crossbencher has expressed concern that it is politically unpopular.
No
— Derryn Hinch (@HumanHeadline) March 21, 2018
Ahead of this parliamentary fortnight, business groups have been targeting their lobbying efforts and advertising campaigns on the ground in Queensland – Hanson’s home state – and the One Nation leader has also visited the Pilbara mining region, meeting with Fortescue.
Martin, who replaced fellow Tasmanian Jacqui Lambie as a consequence of the dual citizenship fiasco, said on Wednesday he would support the big business tax cut to ensure businesses in his state remained competitive.
“After extensive consideration and stakeholder engagement, it is apparent that priority needs to be given to ensuring Tasmanian businesses big and small are competitive in global markets,” Martin said.
“My position is about achieving the best deal for Tasmania, and strengthening Tasmania’s global export markets, bolstering jobs creation, wages growth and building sustainable communities,” he said.
Assuming that the One Nation bloc and Hinch can be persuaded, putting another four yes votes in its column, the government will also need the vote of the newly arrived South Australian senator, Tim Storer.
Storer was associated previously with the Nick Xenophon Team but split from them, and sits in the chamber as an independent. He was sworn in only on Monday, and is yet to assemble a full complement of staff.
The remaining NXT bloc of two senators has confirmed it will oppose the change.
Debate on the package kicked off on Wednesday but was adjourned until the evening. The finance minister, Mathias Cormann, has signalled he wants a vote on the package in this parliamentary fortnight, before the May budget.
Senators are being lobbied by business groups and big companies to support the tax cut on the basis it will keep Australian companies competitive when other countries are reducing their company tax rates.
But they are also being lobbied by the progressive think tank the Australia Institute, which argues a tax cut for Australia’s biggest companies would be a multibillion-dollar threat to Australia’s revenue base.
With the vote breaking in the government’s direction, the progressive activist group GetUp also joined the fray on Wednesday, circulating a report arguing that $1.96bn of the $5.271bn annual value of the corporate tax cut would flow offshore each year, and the banks would get 45% of the total value of the corporate tax.
The GetUp national director, Paul Oosting, urged Senate crossbenchers to resist the lobbying effort from business. “We’re calling on senators to stand up for the interests of everyday Australians in the face of this corporate misinformation campaign”.
Speaking in Port Macquarie, the prime minister cautiously welcomed the developments in Canberra. “We are seeking the support of the crossbench,” Malcolm Turnbull said. “It is vitally important that we provide the incentive for businesses – small, medium and large – to invest and employ.”
