Unpopular corporate tax cuts are still Turnbull government policy despite pressure from Liberal backbenchers urging leaders to dump them.
Treasurer Scott Morrison stopped short of promising to take the corporate tax measure to the next election, but said the coalition is sticking with them.
“We took it to the last election, we won that election, and we continue to seek to legislate, and nothing has changed,” Mr Morrison told Sky News on Tuesday.
But backbenchers are urging the government to put the cuts to a vote in the Senate and let them fail, to deprive Labor of one of its strongest attacks.
And senior cabinet minister Peter Dutton agrees, wanting to give them one more chance.
“We shouldn’t give (Labor leader Bill Shorten) the ammunition to throw back at us.”
Labor campaigned heavily in the Braddon and Longman by-elections on funding hospitals and schools instead of giving a tax handout to big banks, and Liberals concede it hurt them in both seats.
Liberal MP Tony Pasin said the timing of the policy was wrong after revelations of misconduct in the banking sector.
“The electors of Australia have sent us a strong message on the weekend, particularly in Longman, and we need to listen to that,” Mr Pasin told Sky News.
Liberal senator Jim Molan also questioned the timing.
“By doing it now at the same time as the royal commission, we’re making a rod for our back,” he told 2GB.
Mr Morrison said the tax package – which aims to cut the tax rate from 30 per cent to 25 per cent for companies with annual revenues above $50 million – will go to the Senate next month.
One Nation and Centre Alliance senators remain opposed to the plan, meaning the draft laws are unlikely to get through the upper house.
Centre Alliance’s sole lower house MP Rebekha Sharkie, who defeated Liberal Georgina Downer in a by-election on Saturday, said the government hasn’t convinced them it will grow the economy.
She said Finance Minister Mathias Cormann was yet to put a compromise on the table, such as independent senator Derryn Hinch’s push for companies with turnovers below $500 million a year to get the cut.
Opposition Leader Bill Shorten said the cuts would smash a giant hole in the federal budget, with the money better spent on schools and hospitals.
“If you take tens of billions of dollars out of the nation’s ATM, something’s got to give,” Mr Shorten told ABC radio.
“You have less money available for schools and hospitals or you have to increase revenue elsewhere.”
The government needs eight crossbench Senate votes to get the cut through, but so far only has four at most.