Senate powerbroker Nick Xenophon has confirmed he will not support three major planks of the Turnbull government's budget, but has left the door open for negotiation on key industrial relations bills.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Two welfare savings measures will be blocked outright: a plan to make young jobseekers wait four weeks before receiving unemployment benefits, and a cut to the age pension for people who spend more than six weeks overseas.
The Nick Xenophon Team will also use its numbers in the Senate to limit the government's proposed business tax cuts, a centrepiece of the 2016 budget, to businesses with annual turnover of less than $10 million.
Prime Minister Malcolm Turnbull and Treasurer Scott Morrison want to bring the corporate tax rate down to 25 per cent over 10 years, in an escalating manner that would eventually affect all businesses regardless of size.
But Senator Xenophon said that was "not the right priority at this time" when Australia was haemorrhaging jobs in manufacturing and the steel industry faced an "existential crisis", particularly in his home state of South Australia.
"There are other priorities the government should focus on," he told ABC radio on Wednesday. Tax cuts for businesses with turnover up to $10 million "strikes the right balance at this time", he argued.
Labor supports tax cuts for businesses with turnover below $2 million, while the Greens have vowed to vote against any reduction of corporate tax. Senator Xenophon said his compromise represented "a middle way" for the government, which has indicated a willingness to split the tax cuts into tranches.
In the Senate, the Turnbull government needs the support of nine out of 11 crossbenchers to pass any bills blocked by Labor and the Greens. That makes the NXT's bloc of three senators - including Sterling Griff and Skye Kakoschke-Moore - crucial.
The NXT will also block proposals to reduce the age pension for Australians who spend more than six weeks overseas and to make jobseekers under 25 wait four weeks until they can receive welfare. The latter is a watered-down version of a policy from the Abbott government's maligned 2014 budget that would have made young people wait six months for benefits.
Lower house NXT MP Rebekah Sharkie said there were better ways for the government to save money. "If you are being starved, essentially starved out of a foxhole to do this, you have no capacity to find a job," she told ABC radio. "It costs money to look for work."
But it is not all bad news for the Turnbull government. Senator Xenophon held out an olive branch on reviving the union-busting Australian Building and Construction Commission, over which Mr Turnbull called a double dissolution election, reiterating there were health and safety amendments that could convince him to support the bill.
Employment Minister Michaelia Cash appeared "open to these ideas", he said, and overall negotiations with the government were "so far, so good". The bill passed the lower house on Tuesday and now heads to the Senate.
