The Turnbull government's plan to cut company taxes is set to be delayed until 2017, with a pair of union busting bills, and backpacker tax and superannuation changes to take centre stage in the final two weeks of Parliament.
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The expected delay on the company tax cut, which would progressively cut the rate from 30 per cent to 25 per cent over 10 years, comes despite Treasurer Scott Morrison warning Australia risks falling behind the United States and Britain.
It also comes despite Prime Minister Malcolm Turnbull vowing on the eve of the July 2 election that his government would pursue from day one his "enterprise tax cuts to 870,000 incorporated small businesses with turnovers below $10 million".
President-elect Donald Trump has flagged a company tax cut to 15 per cent, from 35 per cent, while British Prime Minister Theresa May has flagged a possible cut from 20 per cent to 10 per cent.
Mr Morrison told Fairfax Media on Thursday that with the economy at a "critical point...it is vital that we get this right and put in place the policies that will secure our economic future".
"Our 10-year enterprise tax plan is all about backing businesses employing Australians to be able to keep up with their overseas competitors so they can grow and invest more in their businesses. This is the way we secure jobs and lift wages," he said.
"Our plan is the proven plan. Both the May government in the UK and the new Trump administration are following the same path because they understand the economic benefits of more competitive tax rates than Labor once advocated themselves, and have now cynically abandoned, out of perceived political self-interest."
But with the Greens and Labor unwilling to support the cut to 25 per cent, the Nick Xenophon Team only willing to back a cut to 27.5 per cent for companies with a turnover up to $10 million, and One Nation indicating it may only back a cut for companies turning over up to $50 million, the Turnbull government is planning to retreat in the short term and use the summer recess to push the case for the full enterprise tax plan.
The decision to regroup in 2017 is recognition of the fact that, with time running out, the government has not been able to land a deal with the crossbench and that it will likely run out of time before Parliament rises on December 1.
The planned tax cut is due to start from July 1, 2016, and would be backdated – in whatever form it is eventually passed.
The Turnbull government does not plan to split the tax cut bill but there is a recognition in government that, if the Senate send back an amended plan that only cuts taxes for some companies, it may be forced to accept that compromise.
Business Council of Australia chief executive Jennifer Westacott was due to tell the organisation's end of year dinner on Thursday evening that Australia's "company tax rate is well above the rest of the world. If the US goes to 15 per cent, we will be close to the highest.
"Funds would be drawn to the United States from global capital markets, including investment that would otherwise have come to Australia. The tide will go out and we will be left high and dry."
The Prime Minister confirmed on Thursday the pair of industrial relations bills that will restore the Australian Building and Construction Commission and establish a registered organisations commission would be presented to the Senate next week.
It had not previously been clear if the government would present the bills this month amid shifting support in the Senate, the resignation of Family First's Bob Day and the possible exit of One Nation's Rod Culleton.
Opposition Leader Bill Shorten said the Prime Minister's "Donald Trump-style corporate tax cuts was a crazy idea during the budget, it was a crazy idea during the election and it was a crazy idea since then".
