GRACosway Weekly Wrap Up: Nothing is certain on energy and tax
- The Government has delayed a Senate vote on its company tax cuts package until after the winter break.
- BAE Systems has secured the $35 billion Future Frigates contract.
- Negotiations on the National Energy Guarantee will progress at the next COAG meeting.
- Labor has announced changes to the Shadow Ministry.
Following the Government’s successful passage of its income tax cuts package last week, focus has shifted to proposed company tax cuts for businesses turning over more than $50 million annually. The Government was forced to delay further debate on the legislation until after Parliament’s winter recess and the five ‘Super Saturday’ by-elections, conceding it had not been able to secure necessary support from members of the Senate crossbench.
Finance Minister Mathias Cormann has described the upcoming five federal by-elections as a “referendum” on economic policy, after Opposition Leader Bill Shorten declared that Labor would reverse already-legislated tax cuts for businesses turning over between $10-50 million, should it win the next election. Mr Shorten has this afternoon reversed his position, following resistance among Labor colleagues. Earlier in the week, the Government seized on Labor’s announcement, with Treasurer Scott Morrison describing it as “terrible news” for Australians and the Prime Minister accusing Labor of launching a “political war” over tax policy.
One Nation undoubtedly caused the Government some headaches this week, with party leader Pauline Hanson refusing to make her position on the proposed company tax cuts clear. Passage of the legislation will depend largely on Senator Hanson’s decision; the Coalition requires the support of both remaining One Nation senators and two additional crossbenchers to pass the changes. After withdrawing her support last month, Senator Hanson has changed her stance twice, denying – and later acknowledging – that she has “flip-flopped” on the issue. It is understood that One Nation’s position is to oppose the legislation.
BAE Systems secures Future Frigates contract
In defence news, British defence giant BAE Systems has secured the $35 billion contract to deliver nine anti-submarine warfare frigates, following sign-off from Cabinet’s national security committee last night. BAE edged out competitors Navantia and Fincantieri to secure the contract for the ‘Hunter’ class frigates, to be built in SA by ASC Shipbuilding. Construction will start in 2020, with the first vessel to be delivered by 2027. The project is expected to create 4,000 Australian jobs and ensure a continuous naval shipbuilding industry until 2042. ASC Shipbuilding will become a subsidiary of BAE Systems during the project, with the Commonwealth to reclaim full ownership of the enterprise at the end of the program. In Adelaide this morning, the PM described the project as a “dynamic game changer” for SA.
NEG gets the go-ahead
Ahead of the next Council of Australian Governments (COAG) Energy Council meeting in August, Energy Minister Josh Frydenberg has been given the green light by the Coalition part room to negotiate a deal on the Government’s National Energy Guarantee (NEG) with his state and territory counterparts. Reports suggest there was a strong show of support for the NEG at the Coalition party room meeting early in the week, while Tony Abbott, Eric Abetz, Craig Kelly and Barnaby Joyce continued to resist the Government’s signature energy policy. Meanwhile, Deputy PM Michael McCormack was tasked by the Nationals with raising a series of demands with Mr Turnbull, which reportedly includes a request for extra funding for baseload generators – including coal-fired power – separate to the NEG. While Minister Frydenberg has already signalled that he may provide an “add-on” to the NEG, Labor indicated that it may vote down NEG legislation in the Parliament should the Government agree to subsidise coal-fired power generation in an attempt to placate Coalition MPs.
Shorten’s Shadow Ministry
Labor Leader Bill Shorten has announced a number of changes to his shadow ministerial team following the resignation of WA MP Tim Hammond, with Madeleine King assuming the role of Shadow Minister for Consumer Affairs; Assisting for Resources; and Assisting for Small Business. Victorian MP Clare O’Neil has welcomed her appointment as Shadow Minister for Financial Services, taking over the portfolio responsibilities of former Senator Katy Gallagher. Ms O’Neil will continue to serve in her existing role as Shadow Minister for Justice.
Looking ahead