In recent weeks, the Government has sought to turn the focus of the political debate onto the economy.
Mr Morrison is close to the mark. The Treasurer accurately points to a widening gap between Australia's company tax rate and that of many other countries. Where there has been a global trend to lower company taxes, Australia has not reduced company tax for most businesses since 2000. Australia's company tax rate (30 per cent for most businesses) already compares unfavourably with that of Singapore (17 per cent) and the United Kingdom (19 per cent). And while the United States currently has a higher company tax rate than Australia (35 per cent or over 39 per cent if state taxes are included), the Republican administration is pushing to reduce that rate to 20 per cent. While Australian resident shareholders may see little direct benefit from company tax cuts due to Australia's imputation tax credit system, it is clear that many foreign investors compare company tax rates when deciding where to invest. But it is not the only factor influencing investment. And even if the Labor Party caves in and agrees to the Government's company tax proposals, this would only result in a reduction over time to 25 per cent. Australia would continue to compare unfavourably to Singapore, the UK (which is scheduled to reduce its rate to 17 per cent over the same period) and possibly the United States.
Fact check: Will Australia be uncompetitive on company tax if the Government's reforms fail?
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