The Turnbull government offered to exclude banks from business tax cuts in a bid to get One Nation's support

Michael Masters/Getty ImagesSenators Pauline Hanson (front left), Cory Bernardi (front right), Brian Burston (middle right), Peter Georgiou (middle left) and Fraser Anning (rear).

The Turnbull government looks set to lose a second signature policy within 24 hours with attempts to find crossbench support for its company tax cut to 25% for all businesses lacking the numbers to pass in the Senate today.

The failure comes after the Prime Minister yesterday scrapped another of the government’s key policy initiatives, an emissions reduction target of 26% in the National Energy Guarantee, amid opposition from the Coalition backbench that has threatened his leadership.

Fairfax Media reports that Treasurer Scott Morrison reportedly proposed to Pauline Hanson’s One Nation that the big four banks be excluded from the tax cut. The pitch was that banks with more than more than $500 billion in assets (CBA has around $980billion) would not receive the company tax reduction.

The Senate has already passed the reduction from 30% to 25% for companies with a turnover of less than $50 million.

Morrison said he gave Hanson and her party “every opportunity” to pass the legislation “without supporting tax cuts for the big banks”.

“Pauline Hanson’s decision to vote for higher taxes regardless, will be a big disappointment to all those businesses,” he said.

But having changed her position repeatedly on the policy previously, Hanson killed off any chance of the government’s plan getting the numbers it needs during a speech in the Senate yesterday, demanding instead that the banks pay for the cost of the current Hayne royal commission into their conduct.

“I will not support this bill. I’m getting criticised for it but, as more comes out, and the public are aware of what the cost is going to be to this country and for future generations, a lot more people are now saying no, they don’t want these corporate tax cuts,” she said.

Fairfax reports that the government gave up on negotiations with the two Centre Alliance (formerly NXT) senators last week because they could not come to an agreement over not cutting services to pay for the $36.5 billion tax cut, and that the cabinet is now looking at dumping the policy altogether and putting the money towards a cash splurge for voters ahead of next year’s election.

The one potentially positive note for Australian small business is that the company tax cut to 25%, which was due to be phased up to 2026-27, may instead be brought forward and introduced immediately, with the support of the Senate.

Fairfax Media has more here.

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