The Turnbull government is standing firm against a key senator's demand to exempt the major banks from its corporate tax cuts despite the window for the bill to pass before the budget nearing.
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The only crossbenchers yet to sign on are Derryn Hinch and newcomer Tim Storer, with Senator Hinch wanting the big four banks exempted from cutting the rate to 25 per cent from 30 per cent.
Finance Minister Mathias Cormann, who is leading negotiations with the crossbench, says Senator Hinch's demand will not be met as parliament sits for the final three days this week. It won't sit again until May.
"The government is not prepared to exempt the banks from our business tax cut," he told reporters in Perth on Sunday.
Senator Cormann said negotiations were continuing "in good faith and constructively" with the crossbenchers.
The government has consistently argued its $65 billion tax cut package will lead to more business investment in Australia, lifting stagnant wage growth and boosting the number of jobs on offer.
He again warned on Sunday Australia would remain uncompetitive if the tax rate didn't drop.
"That would mean less investment, fewer jobs ... over time, higher unemployment which would mean less competition for workers here across Australia, which would mean a drop in wages," he said.
Opposition employment spokesman Brendan O'Connor rubbished that notion, saying it was unlikely wages would rise as a result.
"The overwhelming bulk of the $65 billion... will go to multinational companies; the majority of the largesse will go to foreign shareholders, it will go to banks,"
One of the key supporters of the Turnbull government's business tax cut also doesn't believe it will lead to more jobs or higher wages, but he's sticking by the need for it anyway.
Liberal Democrat senator David Leyonhjelm said Australia was uncompetitive at the moment and the cut would only protect existing jobs and investment.
"If a company is profitable, growing, expanding, (and) needs skilled people, they're going to pay more for those people, but it is an oversimplification to say 'today tax cuts, tomorrow wage rises'," the crossbencher told ABC TV on Sunday.
"It is not going to increase the number of jobs and investment in Australia, it's just going to protect what we've got."
On Sunday, News Corp reported Senator Hinch might now be won over if the government dumps its plan to scrap a payment intended to help welfare recipients with power bills.
Senator Leyonhjlem said he was pretty sure the government would win Senator Hinch over.
Senator Storer - who only joined the upper house last Monday - is still working through the detail before committing to a position on the tax.
Australian Associated Press
