Business giants and premiers accompany Turnbull to Washington

Malcolm Turnbull is taking a delegation of business leaders and state premiers with him to Washington this week.

NSW Premier Gladys Berejiklian. Picture: AAP

Some of Australia’s biggest business leaders, including Lachlan Murdoch, Andrew Forrest, Kerry Stokes and Anthony Pratt, and four state premiers, are expected to join Malcolm Turnbull in Washington this week as the Prime Minister ramps up his push for Trump-style company tax cuts.

Dubbed, “the biggest and most senior delegation to visit the US”, the who’s who of visitors to Washington includes Qantas chairman Leigh Clifford, Rio Tinto boss Jean Sebastien-Jacques, Atlassian founder Scott Farquhar and Commonwealth Bank boss Ian Narev.

The delegation, which also ­includes the Business Council of Australia, is expected to make the case for the Turnbull government’s proposed company tax cuts that are being blocked by the Senate and which the Prime Minister argues would boost jobs and economic growth.

US President Donald Trump last year cut the corporate tax rate from 35 per cent to 21 per cent.

Mr Turnbull, who leaves on Wednesday and will meet Mr Trump and Vice-President Mike Pence this week, wants to cut Australia’s corporate tax rate from 30 per cent to 25 per cent.

For the NSW, Queensland, Victorian and West Australian premiers the trip, involving the National Governors Association, will be an opportunity to discuss with 40 US governors how they run their states.

The South Australian and Tasmanian premiers are not on the trip because they are in the middle of state election campaigns.

NSW Premier Gladys Berejiklian expects to discuss her government’s asset recycling program and encourage interest in investment at the western Sydney airport.

Australia’s ambassador to the US, Joe Hockey, has put together the delegation.

The delegation at the governors association will attend sessions on economic development, health, education, innovation and energy, agriculture and veterans services.

The issue of company tax cuts remains contentious in Australia with economist John Freebairn playing down the impact of cutting company tax from 30 per cent to 25 per cent, saying any effect on wages would be “small” and take “many years”.

“I doubt a lower corporate tax in isolation would be of significant benefit to the Australian economy,” Professor Freebairn said yesterday.

“Lower corporate tax rate is a windfall transfer of tax revenue from Australia to non-residents on existing investments, and on future investments which earn more than the required marginal return.”

Government modelling suggest the economy will grow about 1 per cent if the Senate passes tax cuts for all firms by 2026.

Professor Freebairn, of University of Melbourne, said economic modelling that showed foreign investment increased following company tax cuts was a “game of simplification” relying on factors “about which we have limited information”.

Echoing comments by Reserve Bank governor Philip Lowe last week, Professor Freebairn said he had “concerns about the effects of a larger budget deficit required to fund” the cuts, pointing to the ­potential for higher borrowing costs and debt.