Government strikes deal with Nick Xenophon to pass company tax cuts

The Government has reached a deal with the Nick Xenophon Team to pass its proposed company tax cuts.

The amended legislation will lower the company tax rate from 30 to 25 per cent for businesses with an annual turnover of up to $50 million.

The Government had wanted a flat company tax rate for all businesses over the next decade, but was forced to negotiate with the crossbench during an extended sitting week to get the measures through the Senate.

Finance Minister Mathias Cormann confirmed the deal in the Senate and detailed the additional measures the Government will undertake in exchange.

"The Government has agreed to explore and pursue a power affordability and reliability policy by directing the AEMC and the Climate Change Authority over the next fortnight to jointly produce a report that provides advice with regard to a policy or policies to enhance power system security and to reduce energy prices," he said.

The report will be given to the Parliament by June 1 and made public on June 15.

There will also be a review of gas retention policies, an investigation into a potential gas pipeline from the Northern Territory and the acceleration of the creation of a solar thermal plant in Port Augusta.

A Commonwealth concession loan of up to $110 million will be made available for the project, at a 3 per cent interest rate.

Senator Cormann also confirmed there will be one-off payments for some welfare recipients to help with power bills.

Single people receiving the aged pension, disability pension or parenting payment will receive a $75 payment.

Couples will receive $125.

The Senate passed the measures and they will return to the Lower House, which has been adjourned until budget day on May 9.

Treasurer Scott Morrison said the legislation does not have to pass the House of Representatives straight away as long as the Australian Tax Office (ATO) is notified of the new arrangement.

"Any arrangements completed by the Senate would be able to be immediately acted upon by the ATO following a statement by me as Treasurer that the Government would be supporting those amendments," he said.