Malcolm Turnbull says his government must continue to cut taxes so that it can keep Australia globally competitive.
Turnbull used a speech to the Sydney Institute on Thursday night, before a visit to Papua New Guinea and India, to declare the government needs to keep moving on tax competitiveness after achieving a tax cut for businesses with turnovers up to $50m.
“We have now delivered every tax cut promised for this term of government – just as we set out at the election,” the prime minister said. “But we cannot and will not stop here. Globalisation means we compete with the whole world for investment.”
The prime minister says Australia will not attract more businesses and generate more jobs “if our tax rates are considerably higher than those in other countries, especially when our competitors around the world are looking to cut their rates further”.
Turnbull says if the Australian economy is uncompetitive with trading partners, “you cannot secure the investment and growth you need for families and businesses to get ahead, and you cannot generate the tax revenues to pay for the services Australians need.”
The prime minister’s outing at the Sydney Institute comes before a bracing review of the Liberal party’s 2016 election performance, which will be handed to the party’s executive on Friday.
Guardian Australia revealed on Thursday that the review, prepared by the former trade minister and former Liberal party director Andrew Robb, has found the government was outgunned on the ground by Labor and progressive activist groups, and failed to develop a strategy to neutralise or rebut key attack themes, such as the so-called “Mediscare” campaign.
It criticises the lack of concrete policy sitting behind the Coalition’s “jobs and growth” campaign slogan, and a lack of attention to defining political opponents, noting that a campaign for re-election needs to be formulated during the whole parliamentary term of government.
It also finds research and data analytics functions were severely under-resourced, both in the campaign and over the life of the Abbott and Turnbull governments, leading to a situation where the government was flying blind.
Before the review was handed to the party machine, Peter Dutton on Thursday accepted the government’s continued poor performance in polls would affect Turnbull’s hold on the leadership.
Dutton, the immigration minister, senior conservative and potential leadership contender, said in a radio interview the government had to take tough decisions to turn the polls around, “as the Howard government did, as the Abbott government did”.
It was unclear what tough decisions turned the polls around during the Abbott period. Analysis of the polling data over the life of the government indicated the polls dived after the 2014 budget and did not recover.
Abbott also warned on Thursday the Robb campaign review needed to be “candid” about the deficiencies of the campaign, rather than a “kind of a mealy-mouthed report”.
“I think it’s very important that this be a full and frank assessment of what went right and what didn’t go so right in the campaign,” Abbott said. He also telegraphed his intention to linger in politics. “I’ve still got some years in the parliament. I’ve signed up for this term of the parliament and may well sign up to go around again. So I’ve still got some time left in the parliament.”
Turnbull departs on Friday for a visit to PNG and then on to India. During the PNG visit, Turnbull will visit the Kokoda Track as part of the 75th anniversary commemorations, and participate in business events.
In India, he will discuss trade and investment with the prime minister Narendra Modi. Turnbull will be accompanied by the education minister, Simon Birmingham, to pursue education opportunities in the Indian market.
In his speech to the Sydney Institute, Turnbull said his first visit to India as prime minister would be an opportunity to advance cooperation across a wide range of sectors including energy, education and trade.
The prime minister said there were also opportunities beyond trade. “India wants to provide energy security through a range of technologies, including nuclear, clean coal, natural gas and renewable energy. Australia is well placed to provide many of the raw materials and some of the latest technology.”
On the imperative of tax reform, Turnbull says Australia can not afford to be lulled by 26 years of unbroken economic growth, and can not afford to let confidence turn into complacency. “We may be the lucky country, but we make our own luck by ensuring every element of our strategy is calculated to ensure our success.”
He says an investment drought sparked by Australia’s relative lack of competitiveness will not just hurt big corporations, it will whack the economy and translate into fewer jobs and weaker income growth.
Australia is watching a likely move by the Trump administration to reform the US tax system. Republicans favour a regime where the US company tax, which is currently 35%, would be replaced with a destination-based cash-flow tax.
The new tax would be levied at a 20% for corporations and 25% for unincorporated businesses, and it would be border-adjustable – taxing imports and exempting exports.
This week, the chief executive of the Ai Group, Innes Willox, warned such a move by the US would “disrupt the global taxation of business income”. Willox warned the Turnbull government needs to do more to lay the ground for such a radical change. “It is a contingency that Australia should do much more preparation for, including by readying for the difficult public policy debate that would be involved.”
Most public polls indicate the Australian public is hostile to the idea of tax cuts for big corporations.
A recent Guardian Essential poll indicated 79% supported forcing multinational companies to pay a minimum tax rate on Australian earnings, with 8% opposed and the remainder undecided. Only 24% of respondents approved of the Coalition’s corporate tax cut.
