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Government FINALLY Gets Company Tax Cuts, 333 Days On

Cuts for businesses making up to $50 million a year.
The company tax cuts will pass the Senate.
Fairfax Media
The company tax cuts will pass the Senate.

Almost 11 months after first announcing them in the 2016 federal budget, on the very last parliamentary sitting day before budget 2017, the Coalition government has finally secured enough support in the parliament to pass its signature company tax cuts -- but at a far smaller scale than they had hoped.

The centrepiece of the 2016 budget, announced on May 3 last year, was almost $50 billion in corporate tax cuts. Labor, the Greens and members of the crossbench opposed the cuts, but after nearly a year of negotiations and trading, the government finally secured enough support to pass some of its tax cuts, but only for businesses with an annual turnover of less than $50 million.

It took 333 days, though, and a marathon sitting of the Senate to get it done. Parliament usually sits from Monday to Thursday, but the government forced the parliament to return on Friday to deal with the tax cuts and changes to 18c of the Racial Discrimination Act, and after a long Thursday night and another long Friday, the government finally secured enough support around 5pm. The deciding factor was swinging the support of Nick Xenophon and his fellow two NXT senators.

Prime Minister Malcolm Turnbull told the media on Friday the move will see businesses and workers benefit by being able to invest and employ more in their fields.

"This reform means that we have now delivered the entirety of the tax cuts we promised to deliver in this term of government," he said.

"We've delivered these tax cuts -- the first stage of our 10 year enterprise tax plan, and businesses with turnovers this year of $10 million, $25 million, $50 million will benefit and the beneficiaries will be Australian workers because the firms for which they work, or which they own in the case of the smaller businesses, they will be able to invest more, grow more, employ more.

"At the same time we have as part of our agreement with the Nick Xenophon team, have been able to confirm our existing commitments to ensuring a reliable and affordable energy supply in Australia."

Finance Minister Mathias Cormann announced the NXT senators had pledged their support in exchange for a report into power affordability and reliability, including security of the national power system. He said the tax cuts would save businesses about $24 billion up until the 2026-27 financial year, whereas the government's original plan was to cut about $49 billion in taxes.

"A report, you got a report? That's it?" came jeers from the Labor benches, directed at the NXT, as Cormann announced the deal in the Senate.

Cormann also announced one-off payments for pensioners to help with power bills. People on the aged pension, disability pension or parenting payment will receive $75, while couples are to get $125.

Xenophon's support also cost the government a review of gas policies, as well as a $110 million loan for a solar thermal plant at Port Augusta, in his home state of South Australia.

Labor and the Greens were quick to criticise the deal. Labor senator Sam Dastyari called it a "dirty deal" while Peter Whish-Wilson of the Greens jokingly said the government had "whispered... sweet nothings" to Xenophon for his support.

Xenophon defended the deal.

"The reason energy policy was linked to this legislation is energy policy and prices are crippling Australian businesses and there must be an end point in ensuring security of supply and lower prices," he said.

On Friday the Federal Treasurer Scott Morrison said the move marked "a great day for Australians who work in small and medium size businesses".

"After the last election there was a view that said that the government wouldn't be able to get the Senate," he said.

"The Prime Minister, the Finance Minister, the entire team have demonstrated, whether its $25 billion or thereabout in budget improvement measures that we've been able to get through the Senate, and now today the first stage of the enterprise tax plan.

"This will be coming in to effect in this parliamentary term and it's hit the ground and hit the ground running."

More to come.

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