Treasurer Scott Morrison has seized on Reserve Bank Governor Philip Lowe's praise for the Coalition's proposed $50 billion in company tax cuts, saying his comments demonstrate Labor's opposition to the cuts is "completely untenable".
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Dr Lowe used a speech to high-end money managers in Sydney on Thursday to back moves to cut corporate taxes to ensure Australia remained internationally competitive, effectively calling on Parliament to pass Coalition plans for 10-year phase-in of a new 25 per cent rate to respond cuts by countries including the US and Britain.
He said Australia risked being left behind as international tax competition heated up, with governments working to attract foreign investment, conceding the moves could complicate work to restore the federal budget to balance.
Repeatedly emphasising the Reserve Bank's independence, Mr Morrison called on the Senate to support the plan next month.
"Dr Lowe's assessment, both of the economy and what's needed in the economy, I couldn't not agree more with," he said on Friday.
"I think his clear articulation of the challenges that are in front of the Australian economy are a very sober and clear independent warning to the Parliament" that effective action is needed for the government to meet its 2021 timeline for a balanced budget.
Mr Morrison said Labor had run out of excuses in not supporting the tax cuts for big business, arguing that 15 years ago Australia had the ninth-lowest business tax rate among advanced economies but in 2017 only five of the 35 OECD nations had higher rates.
The Senate appears likely to support moves to drop the 30 per cent corporate rate only for companies with turnover of up to $10 million.
"Here we have arguably the most distinguished and independent and experienced and qualified person in the country when it comes to assessing the economic issues," Mr Morrison said.
"As an analyst, as a respected academic in this area in times past has said, cutting taxes for business supports wages, supports jobs, supports growth and this has to be achieved at the same time as getting the budget back into balance."
The speech also called for infrastructure spending and cuts to regulation to boost the economy and suggested the Reserve Bank board could move to increase official interest rates as its next move.
