Swan slips up on tax guarantee

The embarrassing slip came when Mr Swan was asked about the political stand-off over the 1? tax reduction for all companies, financed by the mining tax. The cut from 30? to 29? is at risk because it is opposed by the Coalition and the Greens support it only for small business.

Mr Swan said the government did not accept a two-tiered company tax system. But he then implied it might do so when asked on Sky: "You guarantee you will deliver the small business cut?"

He replied: "Of course, of course we will deliver that and we will deliver, as we have delivered in the Parliament in the last couple of days, this tax break for 2.7 million small businesses voted against by the Liberal party 2.7 million small businesses getting the instant asset write-off of $6500."

His office said he was talking about the write-off, when he said "of course". His spokesman said: "Obviously the government will be delivering the small business tax cuts that were legislated on Tuesday night."

Greens leader Bob Brown said his party would not back down. "I've informed the Prime Minister that our policy will stand," he said. "If the government insists . . . it's all or nothing, well, it will be nothing. We'll look to extending assistance to small business in other ways."

In Parliament, Mr Swan stepped up the pressure on the Coalition, producing a Treasury analysis of what it would cost business sectors if the company tax cut was defeated and Tony Abbott imposed a 1.5 per cent increase in the rate for large companies to finance his paid parental leave scheme for the 2013-14 year.

According to Mr Swan, the manufacturing sector would pay an extra $392 million in tax, the retail sector $270 million extra and the wholesale trade sector $400 million. Added tax costs for other sectors would be $188 million for media and telco, $322 million for construction and $306 million for agricultural, forestry and fishing.

Mr Swan told the ABC that the business community would put "enormous pressure on Mr Abbott to act responsibly".

But he rejected employer calls for government action to get trade-offs between wage increases and the proposed rise in the superannuation levy from 9 per cent to 12 per cent.

He pointed out the super guarantee was phased in over six years. It would be on the table when there were wage negotiations, along with a whole range of things.

With a Coalition win in Queensland being predicted this weekend, state Opposition Leader Campbell Newman has refused to say whether he would back a legal challenge to the mining tax. West Australian Premier Colin Barnett has said he will back one if it is mounted by the Fortescue Metals Group.