The Abbott government’s bid to have high income earners pay more tax has taken a hit from its own senators.
One of them, Ian Macdonald, intends to cross the floor and vote against the key budget measure, which was introduced to the Senate on Monday.
Another Liberal opponent of the tax hike, Cory Bernardi, won’t go that far.
He concedes his vote won’t affect the eventual outcome because it has the support of Labor.
The government plans to increase the top tax rate, which applies to any income earned over $180,000, from 45 per cent to 47 per cent from July 1.
It hopes to collect an extra $3.2 billion from the measure over four years to help reduce the budget deficit.
Senator Macdonald argues the tax should be extended to corporations, especially foreign shareholders.
“It’s ok for the butcher and baker but not for Coles and Woolworths,” he told parliament.
The government was attempting to bury the measure’s real intention by using a “levy pretence”.
“Is it a tax or is it a levy? Who cares,” Senator Macdonald said.
Comparing himself to Palmer United Party leader Clive Palmer, Senator Macdonald said he did not have the staff to formulate his own tax plan.
“If I had the wit, I would have moved an amendment to include companies,” he said, admitting he wasn’t sure if that was even possible.
Senator Bernardi said he opposed higher taxes, noting Australia already has some of the highest income taxes in the world.
“We can’t afford them,” he told parliament.
Labor is concerned the tax has loopholes that ensure only the “wealthy but poorly advised” will pay the two per cent hike.
The Greens say the measure is a smokescreen to help the government sell the rest of its controversial budget.
Opposition Leader Bill Shorten said the senators were unveiling the division in government ranks.
“I just wish that these dissenting senators would stand up for low-paid people with the same vigour as they’re standing up for Australia’s top one per cent,” he told reporters.