Government's tax cut agenda is shaking up Parliament

Venting on Sky on Wednesday night, Hanson (angry about a range of thing) said: "I don't think he's got the guts to pick up the phone and actually talk to me. And to turn around and say that he's negotiating with crossbenchers is not the truth, because he's not negotiating with me".

The three-stage 10-year package, which promises an extra tax offset for low- and middle-income earners, is the big game in town for the first days of the new Parliament, which opens the week after next, and it's causing some grief.

Despite the government's confident words during the election campaign, the Tax Office has declined to pay the offset of up to $540 until the legislation is passed. This means the July 1 deadline from when the offset was supposed to be available will be missed. (Although people will get from July 1 the tax cut in the pipeline from last year.)

If the tax legislation is passed quickly, a few weeks' delay for the offset is no big deal, especially as many people don't put in their return immediately. But the pressure on the government to deliver the first stage of its plan ASAP - not least because the economy needs the stimulus - reduces its ability to hold out indefinitely on its insistence it won't split the package to accommodate objections to the later cuts.

Labor is in even more of a bind. It is happy to tick off the first stage - worth $15 billion - but has yet to decide its position on stages two (costing $48 billion and starting 2022-23) and three (costing $95 billion and commencing 2024-25).

Its objections are particularly to the last stage, which delivers cuts for higher income earners. Both the later stages come after the next election.

Those urging that Labor should try to block at least stage three argue, apart from the equity issue, that mounting economic uncertainty makes it irresponsible to lock long term cuts.

But a strong case can be made, on principle and practicality, for Labor to wave the whole package through.

The question of when a party has a "mandate" is vexed.

On one view an Opposition can claim it possesses a mandate to stay faithful to positions it advanced before an election even after it has lost that election.

But when the Morrison government went to the polls with the tax package as its prime policy, it seems more than reasonable to say the Parliament should pass it.

The same point would have applied if Bill Shorten had won. He'd have had a mandate for his franking credits and negative gearing policies - both opposed by the Coalition.

It doesn't help maintain faith in the political system, or in election promises, for parties to try to govern from opposition, despite the Senate's voting system sometimes facilitating this. Voters should be able to expect that major election policies of the winning side are broadly implemented.

It is another matter when, as with the 2014 budget, controversial initiatives are brought in soon after an election, during which they weren't flagged.

The practical reason against Labor going to the barricades on the tax package is that as it regroups, there's little to be gained by taking on this battle, especially when it is trying to reposition itself to appeal better to "aspirational" voters and leave behind language attacking the "top end of town".

Labor might be right that the long term tax cuts could look irresponsible later, but if so, that's a fight for the 2022 election.

There are divisions in Labor about what to do. Victorian MP Peter Khalil this week said if the government won't split the package, Labor should vote for it all. Anne Aly, from Western Australia, expressed concern about the package's implications against a darkening economic outlook. Anthony Albanese is consulting within the party before shadow cabinet decides the position it takes to caucus.

While the government focuses the rhetorical pressure on Labor, it has an eye to the alternative route - to get the package through via the crossbench.

To pass legislation opposed by Labor and Greens the government needs four of the six non-Green crossbenchers. These include two from Pauline Hanson's One Nation, two from Centre Alliance, South Australia's Cory Bernardi, and Tasmania's Jacqui Lambie.

Bernardi (who this week announced he is winding up his Australian Conservatives) will vote with the Coalition.

Cormann has been discussing with Centre Alliance their push for lower gas prices, and an agreement on some action appears likely. While this deal is formally separate from the tax package, he and they have that front of mind.

This would leave one vote to be collected.

Lambie refuses to comment on her position. Hanson said earlier this month she was "not sold" on the current package and "therefore not likely to support the measures" - and proposed some of the funds be used for a coal-fired power station and a water security scheme.

After Wednesday's outburst, Cormann was (of course) on the phone to her at crack of dawn Thursday. On her account, he said: "I'm not negotiating with crossbenchers with this at all. We have our three stages. We're going to pass that no matter what".

The government aims to keep the heat on Albanese. By the same token, if the crossbench has to come into play, Cormann won't want a repeat of last term, when he couldn't muster the numbers to deliver tax relief to big companies.