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Business tax cut clears Senate

 

Welfare recipients will get a one-off payment to help them cover their power bills under a deal between the coalition and Nick Xenophon Team to deliver a tax cut to businesses with turnovers under $50 million.

The last-minute agreement, which also included a government rethink on electricity and gas policy, headed off what would have been an embarrassing defeat for Malcolm Turnbull's centrepiece economic policy.

In any case, the government did not get what it really wanted - a cut for all-sized businesses at a cost to the budget of $50 billion.

Instead it will cost $24 billion to 2026-2027 or $5.2 billion over the next four years.

Finance Minister Mathias Cormann announced the deal on Friday afternoon, ending a lengthy filibuster as the government negotiated with NXT's three South Australian senators

Despite the lower house adjourning for the pre-budget break, the government has tax office advice that the business tax cuts can apply for 2016/17 once they pass the Senate and Treasurer Scott Morrison issues a statement verifying they will pass the House of Representatives at a later date.

With NXT on board, the amended bill passed the Senate at about 6.30pm (AEDT) on Friday night with the support of One Nation, Derryn Hinch, David Leyonhjelm and Cory Bernardi.

It passed 30 votes to 27.

Senator Cormann said the tax cut would drive investment and economic growth and create more jobs.

"Both the NXT and the government are focused on making sure that we have both economic policy and energy policy settings in place to ensure our economy is as competitive internationally as possible," he said.

The government agreed to roll out by July 1, 2018 a new "power affordability and reliability policy" - informed by a joint study by the Climate Change Authority and Australian Energy Market Commission - which would push down energy prices and keep the lights on.

It will also consider a "use it or lose it" policy for companies sitting on undeveloped gas fields and put pressure on the big gas suppliers to ensure domestic supplies.

A loan of up to $110 million would be provided for a new solar-thermal plant at Port Augusta in SA, and a study conducted into a gas pipeline from the Northern Territory to SA.

As well, single people receiving the aged pension, disability pension or parenting payment will receive a $75 payment, with couples receiving $125 as a one-off to help them with power bills.

Labor senator Sam Dastyari said NXT had been sold a pup.

"It's a bunch of reviews - a few things the government had to do anyway," he said.

Tasmanian independent senator Jacqui Lambie said the government should be taxing the world's largest oil companies more, instead of cutting corporate taxes.