A call by Industry Minister Ed Husic to cut taxes on corporate profits to encourage AI and automation-based investment in advanced manufacturing has been applauded by business but exposed a split in the cabinet, after Treasurer Jim Chalmers declined to endorse it.

Dr Chalmers, whose office had a terse exchange with that of Mr Husic following the comments, said the production tax credits for critical minerals refining and hydrogen production, contained in the May budget, were an example of the government using the tax system to encourage investment and would have to suffice.