Peter Dutton is sacrificing an election promise on small business tax cuts to pull a political stunt on climate change, Labor claims.

His dedication to the bit is being tested this week.

Since November, an omnibus bill containing $1.55 billion worth of tax write-offs for small businesses investing in digital technology or staff training has stalled in the Senate.

It expires at the end of the month.

The passage of the same 10 days also marks the start of a new financial year, when an estimated three million businesses could otherwise be claiming those deductions on their tax returns, as Josh Frydenberg promised before the last election.

But the deductions have been packaged together with other changes to the nation’s finances allowing for a multibillion-dollar upgrade of the power grid and public investment in clean energy technology, paving the way to “net-zero” carbon emissions by 2050. 

“The Liberals claim to be the party of business, but won’t hesitate to sacrifice small businesses to score some cheap political points,” Treasurer Jim Chalmers said. 

Opposition Leader Peter Dutton has railed against Dr Chalmers for encouraging a public debate on taxation, which he has said is proof Labor intends to break an election pledge on tax. 

Labor promised to keep controversial stage-three tax cuts for high-income earners it voted for in 2019, after they were wrapped up with tax cuts for low and middle-income earners.

“The government continues to back small businesses to grow and create jobs,” said Mr Frydenberg, while handing down the tax cuts in the 2022 budget. 

Totemic issue

But scepticism about renewable energy has become a totemic issue for the Coalition under Mr Dutton’s leadership. 

“The technology doesn’t yet exist at the scale that is needed to store renewable energy for electricity to be reliable at night,” he said in his first budget reply speech. 

[Batteries, his former leader, Malcolm Turnbull countered.]

Financial Services Minister Stephen Jones accused the Liberals of “playing chicken … to make a political stunt on climate funding”.

The new law would establish the Powering Australia Technology Fund and Rewiring the Nation funds which would overhaul the electricity grid and introduce new technology to realise a 43 per cent reduction in Australia’s emissions by 2030. 

The Greens support the measure. And this week the government needs only one additional vote to pass legislation, with a Liberal senator at the centre of a scandal on leave.

Complicating matters, and testing the depth of Coalition opposition to low-emissions technology, key crossbench Senator David Pocock will be moving an amendment to increase the size of a key write-off for businesses by 20 per cent.

That plan has won support from an unlikely duo, fellow independent Lidia Thorpe and the Australian Chamber of Commerce and Industry. 

Coalition Senator Ross Cadell compared the bill’s provision of $10 billion in financing for emissions reduction to the least attractive chocolate in a sampler box (Turkish delight). 

He said the bill included “billions of dollars for infrastructure and transmission lines”.

“All that is in there, and it’s not right,” he told the Senate during its second reading. 

Beyond Zero Emissions, perhaps Australia’s leading climate think tank, endorses changes it says will grow the clean energy industry and the “much needed and rapid transition of Australia’s energy system”.

Official Coalition policy is to back a 28 per cent reduction in carbon emissions by 2030; Mr Dutton has promised moderates in his party he would increase that climate commitment, but he has yet to say by how much.