Denying Australian companies a tax cut will force them to compete in the global market with one arm tied behind their backs, a government frontbencher has warned.
While Treasurer Scott Morrison concedes the proposed tax cuts are politically difficult, he insists they’re crucial to the economy.
Liberal frontbencher Michael Sukkar agrees, saying the government’s tax plans, which is opposed by Labor, is critical to boosting growth and job prospects.
“What Bill Shorten is essentially saying is every Australian company will compete against international competitors with one arm tied behind their back,” Mr Sukkar told Sky News on Thursday.
“How on earth can we have tax rates that are much higher than any of our competitors without it having some sort of impact on our prosperity and investment in this country?”
Labor argues corporate tax cuts take money from schools and hospitals and hands it to the big banks – a line that hurt the Liberal vote in two recent by-elections.
Senior coalition MPs want the tax cuts axed if an upcoming Senate vote on the legislation fails.
The tax package would cut the tax rate from 30 per cent to 25 per cent for companies with annual revenues above $50 million.
Mr Morrison has stopped short of promising to take the corporate tax plan to the next election if the Senate rejects it, saying it was the right economic policy but the politics of it was a “separate issue”.
Home Affairs Minister Peter Dutton is concerned Labor used the tax cuts issue against the coalition in the Longman by-election on Saturday and the opposition should not be given further ammunition to throw at the government.
Resources Minister Matt Canavan says the government is talking through options with the crossbench.
Key crossbench senator Derryn Hinch has suggested cutting taxes only for companies with turnovers up to $500 million, to get the log-jammed plan through parliament.
Fellow crossbencher Brian Burston, who was forced out of One Nation earlier this year over his backing of the tax relief package, has restated his support.
“As I made clear earlier this year, I intend to honour my handshake deal with Senator Cormann to support this important economic reform for Australia in full,” he said.
Apart from Senator Burston, the package is also backed by crossbench senators David Leyonhjelm, Cory Bernardi and Fraser Anning.