PM hoping tax cuts matter in by-elections

Malcolm Turnbull is hoping his government's proposed tax cuts will win votes in by-elections.
Malcolm Turnbull is hoping his government's proposed tax cuts will win votes in by-elections.

The last time Australian voters thought this much about the budget was a decade ago.

It's okay to admit if you've forgotten this year's budget, which was overshadowed within 24 hours when four more dual citizens quit parliament.

Mostly everyone outside Canberra and a few affected industries moves on from the budget fairly quickly each May.

But this year is different.

The Westpac consumer sentiment index shows "budget and tax" news had its highest recall rate and most favourable assessment since 2009.

That year was a significant budget following the Global Financial Crisis, when revenue had tanked and the world's economy was still in chaos.

This year isn't nearly as bad - in fact it's been quite good for Australia.

But petrol prices are up, power prices are up, and house prices are dropping, leading families to worry.

So voters turning their eyes to the budget is potentially a good thing for Malcolm Turnbull - or a bad thing if he can't get it through the Senate.

The prime minister is promising tax cuts now and more in the future, putting $528 a year back into the pockets of low- and middle-income earners.

And he's promising to cut company tax, which he says will mean more jobs.

The rubber hits the road next week, when MPs return to Canberra for eight sitting days before the winter break.

The Senate can make or break the tax plans, which the prime minister and his cabinet have been selling relentlessly.

There is a boatload of legislation to get passed before the break, and Turnbull's political agenda relies on much of it.

Labor doesn't support the full income tax cut plan and neither do the Greens, but the government isn't far off getting the votes from the crossbench.

Finance Minister Mathias Cormann has ruled out splitting the bill in half to win Labor's support, but Bill Shorten has hinted that Labor could pass it and mitigate the damage when he wins government.

"The Senate will have the opportunity to vote for income tax relief for hardworking Australians," Senator Cormann told reporters on Thursday.

It will also have the chance to vote for company tax cuts, which look less likely to pass.

Labor's stance is hardened, and Shorten is relying on that corporate revenue for his election promises.

"They're on the wrong track when they're prioritising giving $17 billion to the big banks," the Labor leader said this week.

So the "Senate whisperer" Cormann is working on the 10 crossbenchers.

Brian Burston has burst free from One Nation, declaring his independence after a stoush over the party's support for the corporate tax cuts.

That leaves "Whispering Mat" to work on Pauline Hanson and Peter Georgiou, Tim Storer, Derryn Hinch and the two Centre Alliance senators.

Hinch wants the corporate tax rate cut from 30 per cent to 25 per cent, but only for companies with turnovers up to $500 million, meaning the big banks don't get a handout.

Storer and the Centre Alliance want broader tax reform.

No one is clear what Hanson wants, because she shook on a deal only to renege on it again, forcing Burston to make a break for it.

Labor and the Greens will keep shouting about handouts for big business, leaving the coalition to decide how much further it wants to fight this battle.

The corporate tax cuts might be a tough sell to voters, but the income tax cuts are easier for Turnbull to take to the Super Saturday by-elections on July 28.

The coalition is a real chance in three electorates it doesn't currently hold.

A win in the Senate means Turnbull can take his income tax cut message to voters in Queensland, Tasmania and South Australia.

If he can tell them Labor voted against it - even better.

Voters in Longman, Braddon and Mayo are getting the tax cut message hammered home every day.

The data shows they're finally paying attention, now Turnbull needs the Senate to play ball.

Australian Associated Press