Turnbull government could pass company tax cuts with support of new senators from citizenship senate shuffle
New Senator Tim Storer will be key to the Turnbull government’s plan to pass a company tax cut. (ABC News: Nick Haggarty)
Yet another new Senate crossbencher was sworn in this week. But like several other recent arrivals, Tim Storer is not in the clothes he wore when he was elected.
Senator Storer, from South Australia, replaced a former senator from the Nick Xenophon Team (NXT), Skye Kakoschke-Moore, a casualty of the citizenship saga. Mr Storer had been fourth on the NXT ticket. By the time he arrived in Canberra, he had fallen out with the party and so he is an independent.
As a free floater, he has become a key to the government’s suddenly improved prospects of passing its tax cuts for big companies, which would take their tax rate from 30 per cent to 25 per cent by 2026-27.
Settling into his new surrounds, Senator Storer had the adrenaline hit of being targeted by government, opposition and vested interests ahead of the tax vote, due next week.
These $35.6 billion worth of business tax cuts — part of the government’s $65 billion ten-year package and applying to companies with turnovers above $50 million annually — were effectively dead last year.
Now, because of the Senate’s goings and comings, they’re seen to have a good chance of passing, with the crossbench negotiations being run by the infinitely patient and usually effective Mathias Cormann, finance minister and Senate leader.
With Labor and Greens opposed to the cut, the government needs nine of the 11 non-Greens crossbenchers.
Citizenship saga could see tax plan pass
If Senator Storer had stayed with the NXT, the legislation would still be dead, because the NXT, opposed to cuts for large companies, would have retained the numbers to stop it.
Independent Senator for South Australia Tim Storer left Nick Xenophon’s party. (ABC News: Nick Haggarty)
Without him, the NXT has gone from three to two senators and so lost its veto power.
This Senate is without doubt the strangest in our history. Of the 20 original crossbenchers (including nine Greens) elected at the 2016 double dissolution, only 12 are still there.
Two Greens (Scott Ludlam, Larissa Waters), two from One Nation (Malcolm Roberts, Rod Culleton), two from the Nick Xenophon Team (Nick Xenophon, Kakoschke-Moore), Bob Day (from the now-defunct Family First) and Jacqui Lambie (Jacqui Lambie Network) are out of the parliament. All but one were felled by various parts of the Constitution’s Section 44. Xenophon (whose citizenship received a tick from the High Court) resigned to try his fortunes in the South Australian election, a move that didn’t turn out so well.
Since the 2016 election, there has been movement between the Liberal Party and the crossbench. Cory Bernardi quit the Liberals, and now sits as an Australian Conservative. Lucy Gichuhi, the next on the Family First ticket, replaced Day — she sat first as an independent and then joined the Liberals.
Of the 11 of the current non-Greens crossbench, only five were sitting there at the start of the term — two Hansonites (Pauline Hanson, Brian Burston), Stirling Griff from the NXT, Derryn Hinch of the Justice Party, and Liberal Democrat David Leyonhjelm.
Five of the other six came into parliament since the election: Rex Patrick (NXT), Peter Georgiou (One Nation), Fraser Anning, a One Nation replacement who immediately declared himself an independent, Steve Martin, who replaced Lambie but sits as an independent, and Storer.
Only Senator Bernardi was elected in 2016.
‘Bradbury of the Senate’
Steve Martin was a gift for the government — he quickly announced he supports the tax legislation, to which Ma Lambie was opposed. In his maiden speech this week, Mr Martin quoted a headline in his local paper, The Advocate, describing him as “Bradbury of the Senate”, a reference to the Australian speed-skater Steven Bradbury who won Olympic gold in 2002 when all the other racers crashed out.
“We now have a small army of Bradburys in this chamber, thanks to Section 44 of the Constitution,” he said, in what’s becoming a popular joke around the upper house.
The Coalition and Labor have had their parliamentary exits and entries, but we’ll avoid further complicating the story except for noting a couple of points.
The Coalition now has the same numbers (30) as after the election — the acquisition of Senator Gichuhi cancelling out the loss of Bernardi. But within the Coalition, the Nationals lost one to the Liberals, after the High Court struck down Fiona Nash, who was replaced by Liberal Jim Molan.
Storer wasn’t the only arrival this week. Amanda Stoker, from the Queensland Liberal National Party, was sworn in to replace former attorney-general George Brandis, the new high commissioner to the UK.
Hinch and Storer the last votes to score
In the tax negotiations, by Thursday the government had seven of the required nine votes in the bag. Pauline Hanson had been brought on board. One Nation was previously opposed, but Senator Hanson was persuaded by funds for apprenticeships and influenced by the Trump cuts, saying “a lot of the companies [in the US] now are actually starting to employ more people”.
Only Derryn Hinch and Tim Storer are needed now.
Senator Storer has an extraordinary opportunity to win concessions in his first parliamentary fortnight.
If the government clinches the legislation it will be a major victory — with its own irony. The citizenship crisis, which caused the Coalition so much grief, will have facilitated the passage, through bringing in key new players (notably Martin and Storer) more open to the policy or to negotiation than those they replaced.
The Coalition government need support from Senator Derryn Hinch to pass their proposed company tax cut. (ABC News: Jed Cooper)
Could Labor repeal company tax cut?
Passage would complicate Labor’s situation. The ALP has yet to announce what it would do about the cuts already legislated for small- and medium-sized businesses — it is expected to want to confine these to smaller companies.
Given all it has said, presumably Labor would commit to repeal this second tranche, using the savings for other things. But could it get the repeal through a post-election Senate?
And before the election, an undertaking to repeal would make for bad relations with big business.
Senate President Scott Ryan (whose predecessor, Stephen Parry, quit in the citizenship crisis) tweeted on Thursday that the Senate now has its complete membership for the first time since Ludlam’s resignation last July.
But nobody should become too complacent. The High Court is considering the future of Labor’s ACT senator Katy Gallagher, who did not have her renunciation of British citizenship confirmed until after she nominated. That judgment will decide whether we see another “Bradbury” arrive.
Michelle Grattan is a professorial fellow at the University of Canberra.
This article originally appeared on The Conversation.