PM Malcolm Turnbull’s policy on corporate tax cuts faces big test. Picture Kym Smith
PM Malcolm Turnbull’s policy on corporate tax cuts faces big test. Picture Kym Smith

PM faces defeat on corporate tax cuts

A SENIOR minister in the Turnbull government concedes "decisions will need to be made" if the Senate votes against its big business tax cuts.

Prime Minister Malcolm Turnbull insists the coalition remains as determined as ever to get the cuts through, despite speculation the policy may be dropped if it is defeated.

Social Services Minister Dan Tehan is more circumspect.

"We just have to wait and see what the Senate does today and then obviously we'll have to make decisions after that," he told ABC radio on Monday.

Debate has resumed in the Senate on draft laws slashing the tax rate for all businesses from 30 to 25 per cent.

The cuts are unlikely to pass as both Labor and the Greens oppose them, and the government has been unable to convince enough crossbench senators. On current numbers, just four crossbenchers are backing the cuts, leaving the government four votes short.

The legislation could be voted on by Monday evening, unless the government changes the program in the upper house.

It comes as Mr Turnbull was forced to announce a backflip on his energy policy, saying he didn't have the numbers to get an emissions reduction target included in legislation

Queensland Labor senator Murray Watt can't see any prospect of the tax cuts passing parliament either.

"If any party, whether they be Liberal, One Nation, or Labor, backs in these tax cuts, they've got a death wish," he told reporters in Canberra on Monday. "Australians are firmly against these tax cuts."

There are reports the prime minister is preparing to abandon the policy "barnacle" if the vote is defeated.

But holding a press conference on Sunday, the prime minister insisted his flagship corporate tax reforms weren't dead yet.

"Negotiations continue," Mr Turnbull said.

"We are determined to ensure that our company tax system, our business tax system, is competitive."

Finance Minister Mathias Cormann also insists the government is "fully committed" to the cuts.

"The government remains fully committed to securing the passage of our proposed tax cuts for all businesses," he told The Australian.

Deputy Nationals Leader Bridget McKenzie is urging the government to stick with its tax cut plans.

"We need an internationally competitive tax rate for our globally exposed industries," she told Sky News.

Shadow treasurer Chris Bowen is watching the crossbench negotiations closely. Mr Bowen is concerned crossbenchers could agree to fast-tracking tax relief for small companies, which has already been agreed to, in return for their support for big business tax cuts.

Labor estimates bringing forward tax cuts for businesses turning over under $50 million could cost the budget $1.8 billion over the next four years, and $6.5 billion in the medium term.