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Posted: 2018-05-09 05:37:57

“The boom in tax revenue since the MYEFO five months ago means we have room for tax reform and it is affordable,” a spokesman for Senator Storer said. “But he has serious doubts about the last round of tax cuts due to come in five budgets and two elections from now.

“They would be highly regressive and there are questions about their affordability.”

As well, he indicated the personal income tax plan made no change to Senator Storer’s position on the government’s $35.6 billion company tax cuts, leaving that bill in limbo.

Tasmanian independent Steve Martin said he backed the case for income tax for workers but questioned the timeframe for voting on the full package.

“Because it’s so close to an election, I would think that it’s responsible to get the first lot up and then work on the rest after the election,” Senator Martin said.

Senator Martin said he could see the reason why the government wanted the entire seven-year plan passed as a package but needed to see more detail.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison.

Photo: Alex Ellinghausen

“My initial thought is that because we are so close to an election, I would prefer that the bulk of it be done next year after the election,” Senator Martin told Fairfax Media.

However, he backed the argument for personal tax cuts.

“It allows more people to get more money in their back pockets, which hopefully will go into more sales, more jobs and more investment. I see that as a positive,” he said.

Victorian independent Derryn Hinch rejected the demand for a swift vote in time for the new tax year.

“That’s their timetable not mine. What’s the rush?” Senator Hinch said.

“They are also saying it’s ‘all or nothing’. They’ve presented omnibus bills before and split them. Not saying yes or no, I just don’t like deadlines – even though I’m a former journo.”

With Labor and the Greens both objecting to key parts of the $140 billion plan over seven years, the government needs the support of nine out of 11 crossbenchers to pass the package.

With three crossbenchers objecting to the timetable, the government faces an early hurdle to getting the tax cuts passed in time to introduce a lower income tax threshold and a new tax offset for workers from July 1.

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The crossbench views are likely to heighten calls for the income tax package to be broken up into separate bills for each of the three big phases of reform, given Labor and some crossbenchers support the first round of tax cuts for workers on low and middle incomes.

Mr Morrison has refused to reveal the year-by-year cost of the personal tax cuts but has rejected claims that too many of the benefits go to the wealthy, arguing that a worker on $200,000 would get a tax cut worth 2.5 per cent while a worker on $50,000 would get a benefit worth 6.3 per cent.

Liberal Democratic Party Senator David Leyonhjelm said the tax cuts should be bigger but were worth supporting as soon as possible.

“It’s too little, too slow – it’s not useless but it should offer more,” he said.

“I think we can reduce taxes more and more rapidly for most people.

“I am very reluctant to let the perfect be the enemy of the good, so even though I think they are too small and too slow, any tax cut is a good tax cut.”

David Crowe

David Crowe is the chief political correspondent for the Sydney Morning Herald and The Age.

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