Business Council of Australia chief Jennifer Westacott says the energy created among US businesses following President Donald Trump's corporate tax cut is palpable, changing the economic landscape.
Ms Westacott was part of a business delegation that joined Prime Minister Malcolm Turnbull on his visit to the US and was able to gauge first hand the impact of slashing the corporate tax rate from 35 per cent to 21 per cent.
"There is no doubt that reducing taxes drives investment, drives higher wages, creates more jobs, that's what US companies are telling us," she told Sky News on Sunday.
"It's real, this is happening, it's not trickle down economics, this is actually having a huge effect on the US economy."
The US tax cut is immediate, whereas the Australian government wants to cut the company tax rate from 30 per cent to 25 per cent for all businesses over the next decade.
Ms Westacott said while it is not "like for like", if the reduction is passed by the Senate it will send a signal so companies can make decisions now.
"If we don't act, companies will make decisions to go where they will get better returns on their investments," she said.
Asked whether she would like to see firms layout what they would do with a company tax cut in terms of wages, she said companies have started to do that but it's going to be on a company by company basis.
"It's very difficult to ask Australian companies to promise a wage increase off a company tax cut when they are not going to receive the benefits for a decade," she said.
Tax cuts have already been passed for Australian companies with a turnover of up to $50 million but the government looks like struggling to get them reduced for all businesses.
The Nick Xenophon Team and One Nation senators have already said they will block the legislation in the Senate, joining Labor and the Greens who are opposed to the cuts.
