News National Pauline Hanson now has an ‘open mind’ on company tax cuts
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Pauline Hanson now has an ‘open mind’ on company tax cuts

One Nation leader Pauline Hanson has backed the government's tax plan. Photo: AAP
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Pauline Hanson appears to be preparing to backflip on the Turnbull government’s company tax cuts, saying she has an “open mind” about the policy she swore only a month ago One Nation would oppose.

As the government seeks to win over the nine crossbench votes it needs to slash the corporate rate from 30 per cent to 25 cent for all businesses, Senator Hanson on Tuesday signalled she was now open to supporting the legislation.

The support of One Nation senators would give the Coalition six crossbench votes, edging the government closer than it has ever been to passing its controversial centrepiece economic policy.

With Labor, the Greens and the NXT staunchly opposed, the government would still need to win over Derryn Hinch and new senators Tim Storer and Steve Martin.

Senator Hanson said on Tuesday she was now seeking meetings with the Business Council of Australia and big businesses to discuss the proposal.

“I’m actually talking to the government about this. I’ve got an open mind,” she told Sky News.

“I’m not going to do anything that would jeopardise investment in the country.”

Senator Hanson said she would be more likely to support the tax cuts if business leaders publicly stated they would increase wages as a result.

But she said she was impressed by the economic effects of President Donald Trump’s decision to reduce corporate taxes in the US.

“A lot of the companies now are starting to employ more people,” she said.

“I’m still not convinced, they still haven’t got me over the line.”

The Trump administration passed legislation in January that reduced the company tax rate from 35 per cent to 21 per cent, though companies that operate in the United States are also required to pay separate state taxes.

The Coalition and business leaders have seized on the US decision to argue Australia must also reduce its corporate rate or risk becoming internationally uncompetitive.

But Labor, unions and other progressive groups such as the Australia Institute think tank argue there is currently no compelling case to cut the local corporate rate.

While some large US-based businesses have increased investment and given staff bonuses since the legislation passed, critics say such a severe reduction in government revenue will significantly increase the country’s budget deficit, leading to potential cuts to public services, as well as further exacerbating economic inequality.

Last month, Senator Hanson wrote an opinion piece for The Australian in which she stated in the first paragraph that One Nation “will not be supporting the passage of the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017”.

“My decision not to support the legislation flows from asking what the companies do with the ­additional cash and who will benefit the most,” she wrote.

She accused the government of making the “false claim that company ­income tax rates drive business ­investment”.

“This is ridiculous – all it does is undermine my confidence in the government and its advisers,” she said.

But on Tuesday, Senator Hanson said she had gone to the Pilbara for meetings with Fortescue and Woodside.

“They want to stay here in Australia. They want to invest in Australia and open up more.”

On Monday, Finance Minister Mathias Cormann said the government hoped to have the Senate consider the legislation by the end of the sitting fortnight.

Last year the Senate passed tax cuts for companies with a turnover up to $50 million, at a cost to the budget of $24 billion over 10 years.

The move was supported by the Nick Xenophon Team, but the party’s two South Australian senators have ruled out supported the remaining tax cuts.

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