LNP backbencher Luke Howarth says Government should drop company tax cuts

Luke Howarth raises his eyebrows while speaking to a reporter. He is wearing a suit.

Federal Liberal backbencher Luke Howarth says the Government should scrap its plan for more company tax cuts if the Senate rejects it again.

Key points

LNP backbencher Luke Howarth says the Government should not fight the next election on company tax cuts
Finance Minister Mathias Cormann had earlier rejected calls to soften the policy
Labor says it is bad policy but still argues the Government should not abandon it

The weekend by-election losses have sparked a push within the Coalition to dump the rest of the company tax plan.

Finance Minister Mathias Cormann said earlier today the Government remains absolutely focussed on the plan.

But there is a view within the Coalition that backing the company tax cuts mean the Government looks like a defender of the big banks.

Mr Howarth told Sky News he thinks the Coalition should put the plan to the Senate again but he said he does not expect that will be successful.

"Tax cuts if they were going to be passed for companies above $50 million, probably would have been already," he said.

"We should try once again to get it through the Senate, it the Senate rejected it again, then drop it and move on.

"It doesn't kick in for years to come anyway, so I don't know why we would want to take it to the next election quite frankly if we can't get it through the Senate now," Mr Howarth said.

His outer Brisbane seat of Petrie neighbours the electorate of Longman where there was a 10 per cent swing against the LNP in Saturday's by-election.

Mr Howarth said dropping the policy would take away Labor's ability to claim the Government wants to give money to banks not hospitals.

He urged Prime Minister Malcolm Turnbull and other ministers who support company tax cuts to take notice of the message from voters.

"You have to listen to the electorate," he said.

The backbencher said that if the electorate and the Senate did not support more tax cuts, then "you don't go forward with it".

By-elections an 'indirect indication' of opposing tax cuts

Independent senator Tim Storer opposes the company tax cuts for big businesses.

He called the by-elections an indirect vindication of his stand on tax policy.

Senator Storer said the Government should not waste time on yet another lengthy Senate debate.

He said the $37 billion earmarked for more tax cuts should be reallocated to infrastructure projects and training.

"All the indications are that spending public money on the right road, rail and public transport projects more generally will provide a much quicker boost to jobs and growth than company tax cuts," Senator Storer said.

Tim Storer answers a question during an interview on AM, wearing a grey suit and blue tie.

The Coalition has already successfully legislated for the tax rate for businesses with a turnover of less than $50 million a year to gradually drop from 30 per cent to 25 per cent.

It wants that extended to all businesses, but it has been opposed by Labor and some of the minor parties and crossbench senators.

The Opposition has been exploiting the divisions within the Government on company tax.

Shadow Treasurer Chris Bowen said there was an "open revolt" against the Prime Minister and the Treasurer's signature policy.

Mr Bowen also challenged Malcolm Turnbull to stick with the company tax plan, saying Labor wants to fight against it at the next election.

"If Malcolm Turnbull drops his key economic policy, the Australian people are entitled to ask what is the point of Malcolm Turnbull?

"They have spent the better part of three years telling us the corporate tax rate was absolutely vital.

"Well if the corporate tax cut goes, Malcolm Turnbull has to go and Scott Morrison has to go with him," Mr Bowen said.

Earlier today, former Prime Minister Tony Abbott told 2GB there are no votes in company tax cuts "because what the public want is money in their pocket directly, not indirectly".

Mr Abbott said while he did not think it changes votes, he accepted the economic argument for lowering the tax rates.

But he said that meant it should be done sooner, not phased in over time.

"There's no point saying let's have tax cuts in six years' time, if tax cuts are worth doing, they are worth doing now."

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