The Liberal conservatives’ unofficial mouthpiece, Peta Credlin, unspooled a new tripwire for the Turnbull Government on the weekend, claiming a win for Malcolm Turnbull on corporate tax cuts would be a loss for Scott Morrison — and vice versa.

From her Sky News platform on Sunday morning, knowing that her meagre audience was mostly journalists and a few political tragics, Credlin framed the debate over company tax within the government as being between “two warring camps” headed by the policy purist Turnbull and the political pragmatist Morrison.

Earlier last week, the PM had initially appeared to be in the same camp as his treasurer, refusing to reaffirm the government’s commitment to all aspects of the 10-year $50 billion tax plan. This was taken as a signal to the Senate crossbench that the government would be willing to abandon tax relief for the top end of town in return for the Senate passing tax cuts for the bulk of the business community.

It might have also been a sign that the government was getting increasingly frustrated by having to defend tax cuts for big corporations that avoid tax, gouge customers, do little to weed out their own corruption and incompetence, and prefer to campaign for popular issues like gay marriage, instead of unpopular issues like cuts to penalty rates.

The newly vague position on corporate tax cuts was also consistent with the more pragmatic approach taken by Turnbull and his team in recent weeks to make concessions to resolve legacy budget proposals, such as the family tax benefit and child care reforms that were amended but passed by the Senate last week.

Getting the bulk of the corporate tax cuts passed would allow the government to claim a win for “small” business — while removing the unpassed big business cuts from the budget would deny Labor the right to hypothetically spend the money on their own initiatives.

However, this new-found pragmatism seemed to desert the PM on Friday night, when he appeared to capitulate after reportedly spending the evening with big corporate players.

After the shindig, the PM briefed the media that he would stand by the tax package in its entirety, saying that if the Senate passed only some aspects of it he would continue to prosecute the remaining tax cuts, even if that meant presenting them to the Senate “again and again”.

This may have been a concession that the government had revealed its hand too early in negotiations with the Senate crossbench and was attempting to reassert its negotiating position by claiming the tax cuts package was an all-or-nothing proposition.

But to many observers it simply looked like the PM had gone to water after being pressured by the corporate bigwigs of the Business Council.

Whatever the reason, the manoeuvre provided an opportunity for Liberal insurgents to add friction to the already fractious relationship between Malcolm Turnbull and his conservative turncoat Treasurer, Scott Morrison.

Credlin pitched today’s cabinet discussions on the matter as an all-or-nothing exercise, noting on Sunday that “It will be interesting to see who wins the battle come the May budget night”.

If any ground is given on the tax package it will now be framed as a loss for Turnbull, and if the cabinet stays firm on keeping the package together it will be described as a(nother) loss for Morrison.

This would likely deepen the cleavage between the PM and the treasurer, not only causing grief for the PM but potentially weakening his claim to the Liberal party room votes that Morrison can corral.

This allows Credlin to proclaim, as she does on most political or policy matters, that company tax is a leadership test for Malcolm Turnbull.

“The current febrile environment has lessened with the positive Newspoll last week,” Credlin told her fellow Sky News bobble-heads on Sunday. “But you can scratch the surface and there’s not much unity underneath it all. They’re willing the government to succeed, but this budget will be a very big test for not only Scott Morrison but also the Prime Minister.”

Peter Fray

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Peter Fray
Editor-in-chief of Crikey