News National Crossbench support for tax cuts fractures amid banking scandals

Crossbench support for tax cuts fractures amid banking scandals

Pauline Hanson bank royal commission
Pauline Hanson's influence over the Turnbull government is shrinking in step with One Nation's defectors. Photo: AAP
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Malcolm Turnbull has been dealt a blow in his bid to slash taxes for the nation’s biggest companies as the banking royal commission prompts a fracturing in crossbench support for the plan.

One Nation leader Pauline Hanson walked back her support for the package on Monday in light of revelations emerging from the royal commission, instead arguing the revenue saved from excluding the big banks should be used to compensate victims.

The government has ruled out such a move, meaning the loss of Senator Hanson’s three Senate votes could now leave the government five votes short of achieving its signature economic reform.

The government has said it hopes to pass the package – to cut the corporate rate to 25 per cent for companies with a turnover above $50 million – after the May budget.

That appears unlikely with the Centre Alliance – formerly the Nick Xenophon Team – continuing to resist the government’s overtures.

The government has reportedly changed tack and is attempting to win over the Centre Alliance’s two votes after meeting a surprising level of resistance from independents Tim Storer and Derryn Hinch, whose opposition doomed the package earlier in the month.

But Centre Alliance senator Stirling Griff told The New Daily on Monday the party’s position “hasn’t changed” despite the government “trying to send us an enormous amount of information”.

Senator Griff said the party still believed the tax cut was not affordable without reductions in core funding to public services, a proposition the party would not countenance.

“We’re still in that space,” he said.

But Senator Griff did say the party’s position on the corporate tax plan would not be informed by the scandals unfolding at the royal commission.

Senator Hanson announced her change of heart on Monday in light of evidence banks have been charging customers for products they never received and continuing to charge fees to people after they had died.

“The banking royal commission … it’s plenty of fodder for the media, but it isn’t driving our position,” Senator Griff said.

Senator Griff said it was the role of ASIC and the ACCC to “decide who’s been naughty or nice”, not the Parliament’s.

But he predicted the revelations from the royal commission were only the “tip of the iceberg”.

Tasmanian independent senator Steve Martin, who has backed the tax plan, confirmed developments at the royal commission had not changed his position.

“I’m reserving any judgements about the [royal commission] until the Commissioner, Kenneth Hayne AC QC, submits an interim report,” he said in a statement to The New Daily.

Senator Storer has said he does not consider the issues to be linked.

Senator Hinch was contacted for comment.

Opposition Leader Bill Shorten argued on Monday the government should ditch its company tax cuts – of which the banks would be a beneficiary – as a result of evidence heard by the royal commission.

Financial Services Minister Kelly O’Dwyer on Sunday dismissed calls to exclude the banks from the corporate tax cuts package.

“So, you know, we’re going to have a new taxation system that’s based on a morality tax? I mean, let’s get a little bit real here,” she told the ABC’s Insiders.

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