Finance Federal Budget Scott Morrison’s ‘$65bn’ bombshell sends Parliament into meltdown

Scott Morrison’s ‘$65bn’ bombshell sends Parliament into meltdown

tax cuts
Scott Morrison Photo: AAP
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Federal parliament has descended into conflict after the Turnbull government revealed the cost of its tax cuts for big business would rise by $15 billion.

Opposition Leader Bill Shorten seized on the concession from the Treasurer, who revealed the full cost of its company tax cuts was now $64.5 billion.

The new figure emerged during a raucous Question Time in which Scott Morrison eventually revealed the enterprise tax plan would cost an extra $15 billion over the 10 years to 2027.

As the Opposition benches howled, Mr Shorten zeroed in on the new figure: “The government has just announced a $65.4 billion hand-out to business, including big business. How are you going to pay for it?”

After revealing the figure in a one-word answer, Mr Morrison tried to return to the lectern, but was rebuffed by Speaker Tony Smith.

“To the Treasurer, once you have sat down, once you hit the bench that is it,” Mr Smith said.

The government gave a series of different answers as it tried to avoid pointing to the new cost of the tax plan.

The Opposition seized on the new cost of the government’s company tax cut.

Prime Minister Malcolm Turnbull first instead referred to the 10-year cost to 2026 – $50 billion.

That comes from the cost of the cuts that have been legislated ($24 billion) and the reductions for larger business, which are yet to pass the Senate ($26 billion).

Asked again, Mr Morrison said the remainder of the plan would cost $36.5 billion, before later saying it was $35.6 billion.

He was then pressed on the inconsistency as Mr Shorten asked how much the entire tax plan would cost from July 1, this year. Mr Morrison simply responded: “$65.4 billion”.

Later, Labor MP Nick Champion was thrown out of the chamber. During a quiet moment, he yelled: “Stick a fork in him, he’s done.”

The government has faced a fierce campaign from Labor over the company tax cut plan, which Mr Shorten has labelled a “$50 billion handout to big business”.

Labor will now have a new, larger figure to use as Mr Shorten prepares to give his budget reply speech on Thursday night.

Mr Shorten said the government had offered “five different answers to the full updated cost of its big business hand-out”.

But the Prime Minister said Mr Shorten’s questions revealed his “persistent desperate manner of misrepresenting everything”.

The difference in lost revenue – from $50bn to $65bn – comes from the fact more businesses are expected to benefit from the tax cuts over time due to forecasted economic growth.

After passing tax cuts for businesses with a turnover up to $50 million a year, the government introduced the remainder of its enterprise tax plan on Thursday. It has previously been knocked back by the Senate.

Following Question Time, Mr Morrison said the government was being “upfront” by revealing the new figure.

“If you want an updated cost over the next 10 years, it’s 65,” he told Sky News.

“And 29.8 (billion dollars) of it is already legislated. So Bill Shorten, if he wants to claim that he has all over this money now, that’s not true for two reasons.”

“One, he would actually have to increase taxes on small and medium sized businesses to do that … And two, he’d have to stop spending it on the things he’s already said he’d spent it on.”

The opposition has said it would not spend the $50 billion on tax cuts, giving it extra money for other expenditure.

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