Treasurer Scott Morrison has seized on the Reserve Bank governor's call to make Australia's corporate tax rate more internationally competitive to support the government's plan for cuts.
Philip Lowe, in his first speech of the year, has told an economic forum in Sydney there is a form of international tax competition going on in an effort to attract foreign investment.
"Like other countries, we face the challenge of responding to this, while achieving a balance between recurrent spending and fiscal revenue," he said.
His comments come as the government guides its company tax cut plan - incrementally reducing the rate from 30 to 25 per cent over 10 years - through parliament.
The RBA governor made Labor's confected opposition to lower business tax completely untenable, Mr Morrison told AAP on Friday.
"Our nation's central banker says we can't afford not to cut business tax," he said.
But the opposition is not for moving, despite the governor's comments.
"You have to make a judgment about whether $50 billion is best spent on a tax cut for some of the big end of town at the same time ... many of the big multinational corporations currently have an effective tax rate here in Australia of zero," Labor frontbencher Anthony Albanese told Sky News.
"They're not paying any tax."
Mr Albanese preferred to cite Dr Lowe's comment that at a time when you can borrow at very low rates there was a case for ramping up infrastructure investment.
"Infrastructure investment leads to future economic growth, leads to a stronger economy, with stronger revenues in the future due to those productivity benefits in the right projects," he said.
Dr Lowe said population growth can put strains on the nation's infrastructure including transport and there was no shortage of finance nowadays for the right projects.
"The task we face then is to identify the best possible projects, harness the planning capacity of government, design the best deal structures to attract private finance where it makes sense to do so, make sure that the construction process is as efficient as possible and price use appropriately," he said.
"These are challenging things to do but they are not beyond our capabilities."
Prime Minister Malcolm Turnbull says his government is ramping up investment in infrastructure and it is important for governments to own a piece of it.
"Governments should be more entrepreneurial," he told 3AW's Neil Mitchell.
"If you borrow you create a liability but if you have an asset on the other side of your balance sheet it may well be a very good investment."
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