Malcolm Turnbull will attempt to forge a path forward on power prices and corporate tax cuts amid swirling speculation of a Peter Dutton-led leadership spill.
The prime minister spent Sunday night trying to rally support on energy policy from his cabinet during a dinner in Parliament House. But Home Affairs Minister Peter Dutton was reportedly a notable absentee,.
To make matters worse for Mr Turnbull, a Fairfax/Ipsos poll released at the same time revealed a sharp drop in support for the coalition.
They now trail Labor 45 to 55 per cent in the two party preferred poll.
With some colleagues growing increasingly restless about the National Energy Guarantee, Mr Turnbull is now promising to use a "big stick" against electricity retailers who fail to deliver cheaper prices.
He wants to impose a "price expectation" on energy companies to bring down power bills, warning those who don't play ball will face tough penalties.
Some federal government MPs are deeply unhappy with a 26 per cent carbon emission reduction target contained in the NEG, and are especially displeased it could be cemented in legislation.
In an attempt to ease these concerns, Mr Turnbull is also expected to perform an about-face and propose the targets be set by regulation instead.
He is also believed to be laying the groundwork to abandon his signature big business tax cuts should the Senate refuse to support them.
Parliament returns on Monday with the potential leadership tension being stoked by backers of Mr Dutton from the conservative side of the Liberal Party.
The Senate will also deal with corporate tax cuts, which appear doomed to fail unless the government can win more crossbench support.
The government needs at least eight of the 10 crossbenchers to get the unpopular corporate tax cuts through, but so far only four have agreed.
The draft laws, which slash the tax rate for all businesses from 30 to 25 per cent, have been listed for debate in the upper house on Monday.
Mr Turnbull is reportedly preparing to ditch the tax cuts rather than take them to the next election should the vote fail.
The lower house will debate a bill giving extra support to farmers doing it tough in the drought as well as draft laws banning modern slavery.
Pauline Hanson will continue her push in the Senate for a plebiscite on Australia's migration levels, while senators will continue debating the government's cashless welfare card trial.
Following a week in which Katter's Australian Party senator Fraser Anning called for a ban on Muslim migration, Australia's first female Muslim senator Mehreen Faruqi will be sworn in on Monday.
Australian Associated Press