Banks could miss out on company tax cuts

Angus Livingston and Karen Sweeney
(Australian Associated Press)

 

The big banks could miss out on corporate tax cuts as a key senator believes Turnbull government ministers are going soft on the full package.

Derryn Hinch wants the corporate tax cuts limited to companies with revenues lower than $500 million a year, but the coalition has so far rejected his plan.

“I know that some of the senior ministers are starting to soften,” Senator Hinch told Sky News on Tuesday.

“They’re spooked by this, they know it’s not popular.”

Treasurer Scott Morrison and Finance Minister Mathias Cormann continue to negotiate with the Senate crossbench to secure support for the tax cuts when parliament resumes next week.

“The politics is difficult. It’s always difficult to do these things but the economics is right,” Mr Morrison told Melbourne’s 3AW radio.

The coalition wants to cut the corporate tax rate to 25 per cent, from 30 per cent, for companies with an annual turnover of more than $50 million.

The small business tax cut for those turning over under $50 million a year has already been legislated.

Senator Cormann is leading talks with the crossbench in the hopes of getting a deal in the same way the government secured support for personal income tax cuts earlier this year.

On current numbers, the corporate tax cut legislation appears doomed to fail with just four of 10 crossbenchers backing the government.

The government needs eight votes, but Pauline Hanson’s One Nation and the two Centre Alliance senators remain opposed.

Senator Hinch has offered to back the cuts but only for companies with turnovers up to $500 million.

“At the moment I will not give a tax cut to robber banks when you see what they’ve done to bloody farmers around this country,” he said.

If it doesn’t get through, Prime Minister Malcolm Turnbull is yet to say whether he’ll take it to the next election.

“We have a mandate from the last election, we took it to the last one,” he told ABC’s 7.30 program on Monday.

But he said “of course” policies would be refined before the next poll, due by May 2019.

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