Key crossbench senator Nick Xenophon predicts the Turnbull government will concede to splitting its plan for company tax cuts in a bid to secure a pre-budget win.
The $50 billion plan - to be introduced incrementally over the next decade to a standard rate of 25 per cent - was announced in the May 2016 budget.
Treasurer Scott Morrison wants it dealt with so that small business can pay less tax this year.
The first leg would lower the rate to 27.5 per cent for companies with a turnover of less than $10 million.
Companies with a turnover less than $2 million now pay 28.5 per cent, while all other businesses pay 30 per cent.
Senator Xenophon expects the government will agree to the first tranche as a holding position for this financial year.
"I am still not convinced about the need for ...giving billion-dollar corporations tax cuts," he told ABC radio on Tuesday.
"$10 million is something they can get through for now."
Labor remains vehemently opposed to the tax cuts, other than for those with a turnover less than $2 million, meaning the government needs the support of the Senate crossbench.
Debate on the package is scheduled to resume in the lower house on Tuesday.