Australia must follow the United States in slashing corporate tax rates or risk losing jobs and investment to other parts of the world, Finance Minister Mathias Cormann has warned.
The federal government is restating its pitch to reduce the company tax rate for all businesses from 30 per cent to 25 per cent after similar moves in the US.
"We need to ensure that our businesses have the best possible opportunity to succeed - we can't leave them with this excessive lead in their saddle bag," Senator Cormann told Sky News on Thursday.
"The future job security, the future career prospects, the future wage increases of Australian workers depend on the Australian parliament passing a more competitive business tax rate here in Australia."
Treasury has warned the federal government it must respond to the US move or else suffer a one per cent hit to Australia's economic growth.
Failing to act could trigger a significant recessionary impact and force downward pressure on revenue, harming the sustainability of the tax base and the provision of essential services, the Treasury briefing said.
The Treasury analysis described the "broken nexus" between Australia and other OECD countries, and urged the Turnbull government to implement the next round of corporate tax cuts or cop a whack to the budget.
