Tax cuts could be capped

Unpopular corporate tax cuts could be capped for companies earning less than $500 million to make sure big banks aren’t given a handout.

UNPOPULAR corporate tax cuts could be capped for companies earning less than $500 million to make sure big banks aren’t given a handout.

Liberal frontbencher Alan Tudge says the Turnbull government is “taking a look” at imposing a cap on its flagship company tax cuts.

Key crossbench senator Derryn Hinch has suggested cutting taxes only for companies with turnovers up to $500 million to force the log-jammed plans through parliament.

“We’re taking a look at this, but as you know, the prime minister and the treasurer have said that we’re fully committed to our corporate tax plan,” Mr Tudge told Adelaide’s 5AA radio yesterday.

Labor argues the corporate tax plan is taking money from schools and hospitals and giving it to big banks – a line that hurt the Liberals in two recent by- elections.

Treasurer Scott Morrison has conceded the corporate tax cuts are politically difficult for the Turnbull government but remains adamant the policy will help the economy.

He stopped short of promising to take the corporate tax measure to the next election if the Senate rejects it.

“It’s the right economic policy. The politics is a separate issue. Governments always have to manage politics,” Mr Morrison told ABC radio.

Resources Minister Matt Canavan said the government was talking through options with the crossbench.

“I think John Howard said once if you can get 80 per cent of what you’re asking for, it’s better than nothing,” Senator Canavan told Sky News. Senior cabinet minister Peter Dutton said Labor had effectively used the policy against the coalition in the Longman by-election on Saturday. “We shouldn’t give them the ammunition to throw back at us,”

IT’S THE RIGHT ECONOMIC POLICY. THE POLITICS IS A SEPARATE ISSUE TREASURER SCOTT MORRISON

he told the Seven Network.

Backbenchers want the cuts to go to a vote in the Senate and dump them if they fail, but Mr Morrison wouldn’t be drawn on whether the government would shelve the policy if it was voted down.

Liberal backbenchers Tony Pasin and Jim Molan questioned the timing of the policy after revelations of misconduct in the banking sector.

“By doing it now at the same time as the royal commission, we’re making a rod for our back,” Senator Molan told radio 2GB.

The tax package would cut the tax rate from 30 per cent to 25 per cent for companies with annual revenues above $50 million.