Business is making a big push for the federal parliament to support the government's promise to cut the 30 per cent company tax rate, warning Australia risks having the third highest tax rate in the developed world.
As MPs and senators return to Canberra on Monday, the Business Council of Australia has launched a new booklet highlighting why Australia needs a more competitive company tax rate, saying doing nothing is no longer a credible option.
The council's chief executive Jennifer Westacott says while other countries have slashed their company tax rate to improve their competitiveness, Australia has been left behind with a rate that has been unchanged for 16 years.
"We must take action to protect Australian jobs, the Australian economy and Australia's competitiveness," Ms Westacott said.
At 30 per cent, Australia's company tax rate is the fifth highest among developed countries but would become the third highest if the US and France fulfil their promises of respective cuts from 35 to 20 per cent and from 33 to 25 per cent.
The Turnbull government's 10-year plan is to incrementally cut the rate to 25 per cent but so far has only secured a reduction support for businesses with a turnover of up to $50 million a year.
The OECD average is 24 per cent, while the average across Asia is 21 per cent.
Both the Keating and Howard governments had cut the company tax rate in 1993 and 2001 to keep it below the OECD average.
Ms Westacott argues the nation needs to thrive and if you reduce the tax on businesses, you create the opportunity for more investment and more jobs.
"A business that isn't thriving can't create jobs and can't give workers a pay rise," she said.
Those who attack the case for company tax rate have no alternative credible plan to get investment growing strongly again, she added.
Business investment as a share of the economy is at the lowest since 1994 when the economy was still in the shadow of the last recession.
"We are falling behind on our tax rates. We have no time to waste," Ms Westacott said.
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