Why we’d be mugs to cut the company tax rate

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Why we’d be mugs to cut the company tax rate

Ross Gittins Economics Editor September 8, 2025 — 5.05am

Ask any businessperson if we should cut the rate of our company tax and, almost to a pale and stale male, they’ll unhesitatingly tell you we should. Why? Because our rate of 30 per cent is high among the rich countries, and this must surely be discouraging business investment. Sorry, not that simple.

Just how un-simple was something I didn’t realise until the Productivity Commission proposed cutting the company tax rate to 20 per cent in one of the reports it issued in preparation for last month’s economic reform roundtable.

At present, the general rate of company tax is 30 per cent, although smaller companies with annual turnover (t