The Turnbull Government’s double dissolution election and changes to Senate voting rules has backfired big time, with the Government now facing an even more hostile and fractured Senate, with the cross-bench hitting a record 11 member compared with eight prior to the 2016 federal election. From The AFR:
The Coalition finishes with 30 senators, which is a loss of three, Labor 26 (up 1), the Greens nine (down one) and the crossbench 11 (up three).
The Crossbench is comprised of four One Nation senators including Pauline Hanson, three Nick Xenophon Team senators including Nick Xenophon, Jacqui Lambie, Family First’s Bob Day, Derryn Hinch and the Liberal Democratic Party’s David Leyonhjelm who held on to win his seat in NSW…
The final result ensures both Senator Hanson and Senator Xenophon are both vital to any negotiation when Labor and the Greens oppose a measure.
While the Turnbull Government’s superannuation reforms look safe (although minor amendments are possible), thanks to support from Labor and the Greens, the Coalition’s planned cut to the company tax rate from 30% to 25% appears to be in deep trouble. Also from The AFR:
The Greens oppose the plan outright while Labor will allow just a cut to 27.5 per cent for small business with annual to turnovers up to $2 million. The first phase of the plan is to give a 27.5 per cent rate to businesses with turnovers up to $10 million.
Treasurer Scott Morrison met Senator Xenophon and his team this week to begin negotiations. Senator Xenophon told The Australian Financial Review he was not shutting the door on the whole 10-year plan but would be seeking trade-offs in the form of support for manufacturing jobs during the painful economic transition.
To pass a Bill through the Senate, the Coalition needs 39 votes, meaning that it is nine votes short. Hence, it is highly unlikely to gain the votes needed to pass its company tax cut plan.
This is great news as cutting the company tax rate to 25% in isolation is unquestionably bad policy – representing a massive windfall gift to foreign owners/shareholders without providing any material uplift in jobs or incomes for Australians.
For these reasons, we have witnessed a veritable conga-line of commentators questioning the policy, including:
- Victoria University senior research fellow, Janine Dixon
- The Grattan Institute
- The Australia Institute
- Goldman Sachs
- ABC’s investigative reporter Stephen Long
- Fairfax writers Peter Martin, Ross Gittins, Michael Pascoe, and Mark Kenny
- Former Liberal leader, John Hewson
- the University of Technology Sydney
- The Australian people
Thank goodness for the Senate, as it will most likely spare the Australian people from a policy that would lower national income and living standards.
