When the International Monetary Fund boosted its forecasts of world economic growth on the back of better prospects in the US this week, Australia's Treasurer Scott Morrison was quick to claim it as an endorsement of company tax cuts.
"These new global growth forecasts demonstrate yet again that the move that's been taken in the United States, but also in other countries, the United Kingdom and France and other parts of the world, to drive their economies and to see their businesses grow, is going to generate growth and jobs," he said.
"Labor is stopping us."
The Fund lifted its forecasts of global growth for this year and the next from 3.7 to 3.9 per cent. It said half of the jump was due to the Trump tax cuts. Its US 2018 US growth forecast climbed from 2.3 to 2.7 per cent and its 2019 forecast from 1.9 to 2.5 per cent.
But much of that boost wasn't due to the most impressive and expensive ($US1.3 trillion) part of the cut; the slicing of the rate from 35 to 21 per cent. It was due to another, cheaper measure: a temporary instant asset write-off. Firms that install new buildings and equipment will be able to deduct the full cost straight away without depreciating it over years. It is similar to, but larger than, capped schemes introduced in Australia by both Labor and the Coalition to boost investment after the global financial crisis and the demise of the mining boom.
Like those schemes, it will be temporary, lasting for five years. Like those schemes, much of it will bring forward investment that most likely would have happened anyway, but later, meaning that when it ends US growth will slump, which is what the IMF expects and one of the reasons it is forecasting weaker US growth down the track.
Australia isn't proposing such a scheme. What the Turnbull government is proposing is a cut in the headline company tax rate from 30 per cent to 25 per cent for all companies, not just those with turnovers of up to $50 million, whose cuts to 25 per cent have already been approved by the Senate.
Will the US cut to 21 per cent, and other cuts including Brtiain's cut to 18 per cent, leave Australia uncompetitive?
It depends on how you calculate competitiveness.
These days John Fraser heads the Commonwealth Treasury. Until 2013 he was head of UBS Global Asset Management and responsible for its worldwide investments. He told a budget forum in Australia in 2015 that while he understood the argument for cutting company tax, his own experience told him that the tax was a "second or third order issue" for would-be investors.
"Generally the internal rates of return that are required – the hurdle rates – are so high it would be false to say the taxation rate, unless they were ridiculous, really large, make a big difference," he said. "It's, frankly, not as important as other issues such as governance and dispute resolution."
Because of the importance of investment allowances, groups such as the US Congressional Budget Office calculates "effective corporate tax rates" that show how much tax will actually be paid on new investments.
Its latest table, released in 2017, but using data from 2012, puts Australia's statutory corporate tax rate at 30 per cent, but Australia's effective rate at just 10.4 per cent. It puts the US statutory rate at 39.1 per cent including state taxes, but the US effective rate at 18.6 per cent. A more recent calculation, from the Oxford University Centre for Business Taxation, put Australia's statutory rate at 30 per cent and Australia's effective rate at 19.1 per cent, below the present US effective tax rate of 23.2 per cent and above the present UK effective rate of 17.1 per cent.
Low rates don't always go had in hand with good business conditions. Oxford identifies Italy, Hungary, Switzerland, Korea, Ireland, the Netherlands, the Czech Republic, Slovinia, Poland and Luxembourg as having the 10 lowest effective rates in the OECD. Most are better known as tax havens than as attractive locations to relocate operations.
To date, Australia has had no shortage of foreign investment, much of it in mining and in Australian shares. Economist Saul Eslake makes the point that if Australia did become starved of investment, the Australian dollar would fall to make it more attractive, which would be a good thing for other reasons.
"Arguably with our currency at 80 US¢ we are attracting too much capital," he says. "Maybe it might be a good thing if we attracted less, because our currency might be more competitive."
He is worried about where the money would come from to pay for the company tax cuts, which would be nowhere near self-funding. Even if they are budgeted for, and Finance Minister Mathias Cormann insists they are, it will be money which isn't available for other purposes, including larger personal income tax cuts.
Director of the Australian National University Tax and Transfer Policy Institute director Miranda Stewart says the company tax cuts could be paid for by abolishing the almost uniquely Australian system of dividend imputation that shields local investors from tax on dividends where the companies have paid tax.
Labor, the Greens and the essential crossbench members of the Nick Xenophon Team simply won't countenance a tax cut for big business however it is funded.
Morrison is going over their heads and appealing to their supporters.
Before Christmas he said while Australians were sitting on the beach enjoying summer, foreign companies would be making decisions and fleeing the country.
This week Qantas chief Alan Joyce pledged to use the windfall that would come from lower tax to lift wages, and Wesfarmers chief executive Rob Scott said he too would pass the benefits on to workers.
In the US, supermarket giant Walmart came good on a similar promise and announced wage rises and cash bonuses for thousands of its workers in the wake of the Trump reforms.
For the moment, Australian voters are not buying the arguments.
The latest poll to ask a question, the Essential survey in December found only 29 per cent of voters approved of the full tax cut for big business. Forty nine per cent rated personal tax cuts as a higher priority.