Pauline Hanson has performed a spectacular backflip over the Turnbull government’s company tax cuts, saying she will now back a policy she last month slammed as being based on a “false claim”.
In a major boost to Malcolm Turnbull’s hopes of passing his centrepiece economic reform, Senator Hanson said One Nation’s three senators would back the reform after the government agreed to create a small pilot program for 1000 apprenticeships in private businesses.
It has been estimated the apprenticeship scheme will cost $60 million, while the government’s corporate tax cut plan will cost the budget $65 billion in lost revenue over 10 years.
The enormous about-face appears to have been prompted by meetings Senator Hanson held with Fortescue Metals chief Andrew Forrest and Woodside Petroleum in Western Australia last week.
Only last month, Senator Hanson declared her party would not back the policy, accusing the Turnbull government of “persist[ing] in the false claim that company income tax rates drive business investment”.
Labor, which has labelled the tax plan an “unfunded wrecking ball to the budget”, lashed the One Nation leader over the backflip.
“Senator Hanson should just say she’s capitulated to the government and stop using apprentices as an excuse,” Labor senator Doug Cameron told the Senate on Thursday night.
The ABC, which first reported Senator Hanson’s support for the tax cuts, said the pilot program meant the apprenticeships would be 75 per cent taxpayer-funded in their first year, with the government providing 50 per cent in the second year and a quarter of funding for the third year. The final year would be fully paid for by the employer.
The government is still yet to convince crossbench senator Derryn Hinch or new independent Tim Storer, who has remained tightlipped about his position on the plan to slash the corporate tax rate from 30 per cent to 25 per cent for all businesses.
Both would be required to support the legislation for it to pass the Senate next week.
Senator Hanson told the ABC on Thursday the pilot program would “open up apprenticeships for young people, especially in rural and regional areas”.
“I’m for helping the kids. Getting them off welfare. Getting them off drugs. Getting them into jobs,” she said.
“I’m hoping that business will see the success of this and see the value of having young apprentices.”
It is also understood Tasmanian senator Steve Martin has also been promised funding for local projects in his state. He did not respond to a request for comment.
The additional tax cuts not yet passed by Parliament would cost the budget $36.5 billion in lost revenue over a decade.
Including last year’s tax cuts for companies with a turnover up to $50 million, which have already passed, the government’s entire tax plan will cost the budget $65 billion in lost revenue over 10 years.
The government argues the lower corporate rate will allow businesses to invest and grow, which will also lead to more demand for labour, and helping to arrest the economy’s sluggish wage growth.
The Australian Council of Trade Unions wrote to crossbenchers on Thursday in a last-ditch bid to ward them off the tax cuts.
It came after the Business Council released a letter from 10 companies on Wednesday saying the would invest more in Australia if the cuts were passed.
“We urge all senators to reject more special treatment for big businesses. They are already gaming the system,” ACTU Secretary Sally McManus said in the letter.
Mr Turnbull said on Thursday there was “no question that you’ll see a rise in wages with a reduction in company tax”.
“That’s always been the case and that’s actually the point that Bill Shorten used to make when he was in government and indeed what many other Labor leaders have done.”