Nick Xenophon the key to tax cuts   

    The Australian
    July 14, 2016


Independent South Australian senator Nick Xenophon may use his bolstered numbers in parliament to leverage long-awaited gambling reform, leaving open the possibility of doing deals with Malcolm Turnbull to help problem gamblers.

The key crossbench senator, who will meet Tasmanian MP ­Andrew Wilkie today to discuss a joint anti-gambling platform, will write to the Prime Minister and Bill Shorten this week outlining his wishlist for action.

Mr Turnbull will have to be prepared to give ground on major concerns to independents as it ­becomes apparent most of the government’s company tax cuts will be doomed unless he is willing to compromise.

Senator Xenophon, who could determine the fate of the ­Coalition’s policy agenda in the new parliament with a bloc of three senators, may also use his numbers to scuttle the government’s plans to introduce company tax cuts for big business, saying Mr Turnbull first needed to ­deliver financial support for the “jobs crisis” in the struggling manufacturing sector.

The Coalition had last night won 27 Senate seats and was on track to win two more, perhaps finishing with 30. The Coalition would need support from at least nine other senators to pass its legislation in the upper house.

Under the best-case scenarios for Labor and the Greens the parties would pick up 27 and nine seats respectively. If under those circumstances they teamed up with Senator Xenophon’s new party to block Coalition legislation the bills would remain stuck in the Senate.

Senator Xenophon plans to use his profile and increased parliamentary presence to elevate problem gambling as a political issue to pressure the government for ­action.

“With more people on the team, there will be a renewed push, we can have more resources, more focus on this, but it really has to be a grassroots approach,” he told The Australian.

As Mr Turnbull pledged to present his budget measures to parliament in the form they took before the election, Senator Xenophon said he would support tax cuts for small businesses only with a turnover of up to $10 million. He is seeking financial support for troubled steelmaker Arrium and assistance for the automotive sector as it faces final collapse.

The government’s 10-year ­enterprise tax plan starts by giving businesses with annual turnover of up to $10m a 1 per cent tax cut in the first year, reducing their tax rate to 27.5 per cent. That extends to bigger companies year-by-year and the rate ultimately reduces to 25 per cent for all businesses.

“Right now the priority has to be to save Arrium and manufacturing jobs in a way that is sustainable,” Senator Xenophon said.

“Before we consider any ­further tax cuts beyond the $10m we need to do something about the jobs … if we don’t we will see a massive increase in unemployment benefits being paid and you will see a commensurate drop in income tax as people pay less tax.”

Labor supports company tax cuts for small businesses with an annual turnover of less than $2m but rejects the remainder of the government’s enterprise tax plan.

Greens leader Richard Di ­Natale is also in no mood to negotiate on Coalition budget measures that he deems not in the national interest, insisting his party will continue to oppose “bad” legislation.

“We oppose all tax cuts to business because if it’s a choice ­between funding Medicare or our schools versus a tax cut to business we think we should be funding schools and hospitals,” he said, adding the Greens would wait until seeing the detail of the legislation before finalising its position.

Personal income tax cuts for Australians earning more than $80,000 fell under the same veto, Senator Di Natale said.

But if Mr Turnbull can soothe his backbench’s anguish over superannuation changes he may find Greens support for key budget measures, with Senator Di Natale keen for Australians on high incomes to pay more effective tax.