The Turnbull government will put its company tax cuts to a Senate vote by the end of March in the hope that plans by the US and Britain to cut their tax rates, and the state of the budget, will force a last-minute rethink among the Senate crossbench.
The government has only enough stated support so far to legislate a tax cut for companies with annual turnover capped at $10 million but will persist in trying to persuade the Senate to give more ground before the March deadline. If it fails, then it is likely to split the bill and cut a deal.
Federal cabinet is scheduled to discuss the strategy when it meets in Canberra on Tuesday for the first time this year.
The case for the tax cuts, now central to the government's economic plan, will be spelt out by Prime Minister Malcolm Turnbull as part of his year-launching National Press Club Address tomorrow.
His speech will be preceded by Opposition Leader Bill Shorten who will use his Press Club appearance today to further Labor's Australia-first policy, which it has ramped up in the wake of Donald Trump's election in the United States.
Mr Shorten, who has already promised a crackdown on 457 visas for imported temporary skilled workers, will recommit to increasing the skills of Australians so jobs can be filled locally.
"It's become too easy to import skills rather than train our own people," he will say. "Too many work visas are being used as a low-cost substitute for employing an Australian, not to address a genuine shortage.
"We cannot allow our country to become an unskilled enclave in a modernising Asia."
The Coalition's legislation to cut the corporate tax rate from 30 per cent to 25 per cent for all companies over 10 years was introduced to the House of Representatives late last year but the government chose not to put it to the Senate in the hope that attitudes would change over the summer.
The government, which needs eight crossbench votes, wanted senators to mull the state of the budget and the need to generate economic growth, as outlined in the mid-year economic update released just before Christmas.
It was hoped plans by US President Donald Trump to cut the US corporate rate from 35 per cent to 15 per cent, and Britain's plans to reduce its rate to 17 per cent by 2020 would exert more pressure.
Last week in London Treasurer Scott Morrison repeated the warning he sounded late last year that Australia risked being stranded if its rate remained at 30 per cent.
Parliament resumes on Tuesday next week and there are just four Senate sitting weeks before it rises on March 30 for a pre-budget break of five weeks.
Labor and the Greens oppose the corporate tax cuts while One Nation and David Leyonhjelm are supportive.
The three Nick Xenophon Team votes are crucial but Senator Xenophon repeated yesterday that his team was still prepared to allow only the first phase of the tax cut plan – a 27.5 per cent rate for all companies with a turnover of up to $10 million. Senator Xenophon has not ruled out allowing greater tax cuts in ensuing years but is not prepared to support any more at this stage.
Senator Xenophon and Mr Morrison have another meeting pencilled in for later this week. Mr Morrison is hoping Senator Xenophon will relent and allow a cut for businesses with $50 million thresholds, which would incorporate many companies in the Senator's home state of South Australia, including such iconic businesses as Cooper's and Haigh's Chocolates.
Business groups are also stepping up their lobbying efforts ahead of the March deadline.
The mid-year budget update forecast a worsening of the budget deficit over four years of $10.4 billion and reduced nominal GDP.
Labor has argued that the government should dump the company tax cuts, saying the $48 billion it would save would assure a return to surplus and would shore up the AAA credit rating.
The government argues the cuts are needed to provide more sustainable growth and, hence, revenue.
"If you leave that situation in place ... then the Parliament leaves the Australian economy at the risk of being stranded," Mr Morrison said in December.
Mr Shorten will argue today that the best way to generate growth was through training and skills, which would include reinvigorating the TAFE sector and apprenticeships.
"Right now there are too many dodgy traineeships and certificates out there, acting like counterfeit notes, devaluing the real thing," he will say.
"We need to strip away the low-quality rip-offs and get our training system ready for a world of lifelong learning."
Mr Shorten will urge Mr Turnbull to dump any last hopes that the regional free trade pact, the Trans-Pacific Partnership, can be saved after Mr Trump's veto.
"Employers are consistently reporting skill shortages in trades occupations. Yet the only time Malcolm Turnbull uses the word trade, is to spruik the benefits of an agreement that no longer exists," he will say.
"Attempting CPR on the TPP is a waste of time. It's worse than a vanity project. It shows this Prime Minister put his own ego ahead of Australia's national interest.
"Our priority should be economic reforms that actually deliver jobs, not fantasy trade deals."
