One Nation reneges on company tax cuts, and the Coalition's signature policy looks close to doomed

Lisa Maree Williams/Getty ImagesOne Nation Senator Pauline Hanson.
  • The government needs crossbench support for its plan to drop the company tax rate to 25% by FY27 to pass the Senate.
  • In March, a deal was struck with Pauline Hanson’s One Nation offering 1000 apprenticeships in return for support for the legislation.
  • Today Hanson accused the government of misleading her and issued a long list of new demands in return for her support.
  • Without One Nation’s 3-vote bloc there’s no chance of Malcolm Turnbull’s signature policy becoming law.

The Coalition government’s company tax cuts look doomed after One Nation leader Pauline Hanson reneged on her deal to support the plan in the Senate.

With Labor and the Greens opposed to the cuts, the government needs nine of 11 crossbench senators to support its plan to drop the company tax rate from 30% to 25% for firms of all sizes.

In March, Hanson cut a deal with finance minister and government Senate leader Mathias Cormann to back the tax cuts in exchange for a taxpayer-funded pilot program for 1000 apprenticeships.

Meanwhile, the government was working on fellow crossbench independents Derryn Hinch and Tim Storer to get the numbers it needed to pass the legislation.

But today the One Nation leader walked away from the plan, taking her party’s three senate votes with her, unhappy that the apprenticeships were not funded in the budget earlier this month.

“In the budget, the government has done absolutely nothing. I couldn’t see anything there about the 1000-place apprenticeship scheme,” Hanson told The Australian.

In response Senator Cormann said he was “very disappointed”, but hoped it was “not the last word” from Hanson.

He said there was not funding in the budget because it was contingent on the company tax cuts being passed in the Senate first.

“It was always understood and accepted by Pauline Hanson and One Nation that the things we agreed were conditional on the successful passage of the legislation in full,” he said.

“I hope that this not the last word spoken on this and that we will be able to persuade Pauline Hanson and her team to go back to the position that they adopted earlier this year.”

In an interview with The Australian, Hanson produced a new list of demands, accusing the government of not being “upfront and honest with me and the public” and failing to win over voters with its proposal.

“The people in general don’t want it. It has not been well received. The Government has not been able to sell the package to the people and they haven’t cut through,” she said.

She also poured scorn on the phase-in for the tax cuts to 2026-27.

“The whole fact is, if they’re serious about this, then start doing something about it now … This Government is talking about it six or eight years down the track. Well, that’s not good enough,” Hanson said.

Despite the government’s recent attempts to keep AGL’s Liddell coal-fired power station open beyond its 2022 plan to close it, the One Nation leader is also angry that there was no funding for coal-fired power.

“There is nothing in the budget about a coal-fired power station,” she told The Australian. “Unless they start reducing energy prices we are going to lose businesses.”

Her list of demands also includes a cut in immigration, changes to the Petroleum ­Resource Rent Tax (PRRT), a gas pipeline connecting Western Australian gas fields with the east coast, as well as “use it or lose it” provisions for gas exploration and development, more support for pensioners, a greater focus on reducing multinational tax avoidance and getting banks “to pay for this royal commission into the banking sector”.

“There has to be a decent PRRT,” Hanson said. “We need a pipeline from the west coast to the east coast. Unless we get electricity prices down in this country, we are going to see the closure of a lot of businesses.”

The Australian reports One Nation struck a secret deal with the government in March that included plans to force at least 15% of WA gas supply to be reserved for the state, as well as release renewals on energy resources to continue only if companies began developing reserves within a year of discovery. She also wanted to reduce the exploration tax offsets by around $6 billion.

The first phase of the government’s tax cuts for companies with a turnover of up to $50 million will still go ahead.

You can read more on Hanson’s latest demands in The Australian here.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.