The Turnbull government has pulled its legislation to cut the corporate tax rate for big business from 30% to 25% until the May budget session because it lacks the numbers to pass the politically unpopular measure this week.
The finance minister, Mathias Cormann, confirmed in the Senate on Tuesday evening the government would make a tactical retreat for now, lacking support from Victoria’s still undecided Derryn Hinch and new South Australian senator Tim Storer despite a full-court press from business chiefs and days of backroom negotiations.
The government pulled the bill as the prime minister, Malcolm Turnbull, was giving a speech at a gathering of chief executives in Canberra. Members of the Business Council of Australia are in Canberra for an annual outreach session with parliamentarians.
Turnbull told the BCA gathering the government was “not giving up” on the effort get the company tax cut through the parliament.
The BCA also confirmed on Tuesday evening it would launch a new advertising blitz in an attempt to boost its stocks with the Australian public.
The materials accompanying the new campaign note “the business community has become an easy target” and “anti-business forces have a significant campaign advantage in terms of organisation, communication and data collection”.
“We have seen a wave of populist policies and proposed new laws that have, and will continue to have, business impacts. We cannot sit back and allow Australians to only see the negatives and forget about our workers,” the materials say.
“The Australia at work advertising campaign will seek to interrupt the anti-business conversation and remind people of the value of a strong business community – when business thrives, Australia thrives.
“The campaign will tap and leverage national pride and project a sense of energy around business getting on with it.”
The failure to push the issue through to a vote represents a setback for the Coalition, which launched a major diplomatic offensive with the crossbench with the objective of securing a vote on the big business tax cut this week.
A vote this week would have locked in the change before the May budget.
Progressive activist groups opposed to the reform have spent the past few days trying to disrupt the government’s momentum, and slow down the race to a final vote.
The progressive thinktank the Australia Institute welcomed the effective deadlock. “The economic case for these company tax cuts never stacked up. The benefits were largely to foreign shareholders, with a huge long-term revenue cost to the budget,” said the thinktank’s executive director, Ben Oquist.
The government and business lobbyists were also on the back foot courtesy of a report in the Australian Financial Review early on Tuesday of a survey suggesting members of the BCA were not keen to prioritise passing the benefits of tax relief through to their workforce.
A BCA staff member initiated a survey of the membership in January after a decision by the US president, Donald Trump, to cut the company tax rate. According to the report in the Financial Review, the survey data suggested Australian executives were more likely to return the proceeds to shareholders or invest than boost wages or employment.
The BCA on Tuesday confirmed the existence of the survey, undertaken on the online tool SurveyMonkey, but argued it was incomplete and was discontinued by the organisation before being properly collated.
Cormann thanked the Senate crossbenchers who had signed on to the policy over the last few days, including the new Tasmanian Steve Martin, who replaced Jacqui Lambie courtesy of last year’s dual citizenship imbroglio, and the One Nation bloc.