The Turnbull government’s company tax cuts have been sunk by the Senate, at least until May, after the final two crossbench senators refused to back the legislation despite a last-ditch lobbying effort from corporate Australia.

In order to factor the new corporate rate into the May budget, the government set a deadline of Wednesday night to pass the tax cuts legislation, which slashes the rate from 30 per cent to 25 per cent for businesses with a turnover above $50 million.

But even as the Business Council of Australia (BCA) revealed a final push to win over a sceptical public on Tuesday night, Finance Minister Mathias Cormann made the surprise admission that the government had come up short.

Without the support of Derryn Hinch and Tim Storer it had won only 37 votes, two short of the 39 needed for the legislation to pass.

“Given that proposition, given that that is the situation we’re in, the government has made a decision that we will need to do some more work,” Senator Cormann told the Senate.

The government had focused its pitch to the crossbench and the public on the argument that a reduced corporate rate would allow companies to invest more in Australia, creating more jobs and more demand for labour, which in turn could lift the nation’s sluggish wages growth.

But as The New Daily has reported extensively, critics of the push to slash corporate taxes, including Labor, the Greens and the union movement, had argued overseas shareholders would be the biggest beneficiaries of a reduced rate.

Last month, The New Daily also reported the effective rate paid by many companies in Australia is much lower than 30 per cent – and has been calculated at 26.6 per cent by the US Congressional Budget Office and 10.4 per cent by the Oxford University Centre for Business Taxation.

As the government’s hopes of a deal were dashed, Prime Minister Malcolm Turnbull put on a brave face at a BCA event at Parliament House, encouraging business leaders to “keep talking to the crossbench”.

Conceding the legislation would not pass this week, Mr Turnbull added: “We’re not giving up. We’re determined to get this passed and we will be continuing to work with the crossbench to secure it.

“I want to encourage you to keep talking to the crossbench … I’d encourage you to talk to the opposition and the Greens but it would be a slog for you.”

Business leaders gathered in Canberra on Tuesday night for what was originally thought to be the eve of a vote on the tax cuts bill.

In a sign the BCA will take a new tack as it seeks to win over Australians, a new advertising campaign, “Australians at work”, was previewed at the event on Tuesday evening.

While the business community had been vocal in its support for a tax cut, opinion polls found widespread scepticism among Australians.

Also on Tuesday, senior government figures told the Coalition party room to “personalise” their message to voters when campaigning for policies such as the tax cuts in their electorates.

Earlier in the day, the government’s lobbying efforts were dealt a blow after a report in The Australian Financial Review revealed most businesses had told the BCA in a secret survey they did not intend to use the proceeds of a tax cut to create more jobs or boost wages.

Opposition Leader Bill Shorten seized on the report, telling question time: “Why is the Prime Minister still claiming his big business handout will put money in workers’ pockets when even big business says it won’t?” 

Labor revealed on Tuesday it would repeal the tax cuts for businesses with a turnover above $50 million if they pass Parliament before the next election.

“Regardless of what legislation is passed this week, Labor will repeal this corporate tax giveaway of $65 billion to the biggest companies in Australia, the banks and the multinationals,” Mr Shorten said.