Treasurer Scott Morrison has issued a stark warning in the wake of the largest corporate tax cut in US history, saying international companies will flee the country while Australians are sitting on the beach this summer.
Mr Morrison has become so alarmed at the prospect of Australia being left with a corporate tax rate of 30 per cent that he fears February - when Parliament is due to return - will be too late, as northern hemisphere-based companies will be making decisions in January on whether to stay in Australia or move elsewhere.
"They will be considering their investment plans over their winter, our summer," Mr Morrison told Fairfax Media in an interview to mark the end of the year.
"While many Australians will be at the beach the investment chiefs in major companies will be at work."
The Treasurer said he had stopped talking to the crossbench about his proposal to cut taxes from 30 to 25 per cent over 10 years because he "knew their position" and that it was time for Bill Shorten to abandon his "bloody-minded recalcitrant opposition" to provide investment certainty.
The Turnbull government faces the near-impossible task of getting the tax cut for all companies through the Senate after the Nick Xenophon Team confirmed to Fairfax Media on Thursday it would not back the move.
"We do not support the government's proposed tax cuts for big business as this would be fiscally irresponsible and the economic evidence is questionable," said NXT senator Stirling Griff.
Independent senator Lucy Gichuhi, who has historically sided with the government, remains undecided. A One Nation spokesman said the party had yet to see any "proposals come across its desk".
The government needs the four One Nation votes and the three votes of NXT to have any hope of reaching the required 10 crossbench votes to pass the legislation as Labor and the Greens are strongly opposed.
Mr Morrison took a swipe at the crossbench and called for Labor leader Bill Shorten and shadow treasurer Chris Bowen to have a "fair dinkum" discussion about tax cuts after US President Donald Trump successfully reduced the corporate tax rate from 35 per cent to 21 per cent on Thursday.
"The crossbench can't always be relied upon to do the economic heavy lifting and you would expect a mainstream political party like Labor to know better," Mr Morrison said.
Labor's shadow assistant treasurer Andrew Leigh said analysis by the US Congressional Budget Office showed after tax concessions Australia's effective corporate tax rate is the 9th highest in the G20 and therefore "in the middle of the pack" just behind the US.
"Effectively, the argument that's being made by the Liberals is that we should follow Donald Trump wherever he leads," he said.
"We have seen wages stagnate and yet the Liberals' answer to Australia's economic challenges has been a budget-busting corporate tax cut for big multinationals paid for by raising taxes on middle Australia."
Mr Morrison said that company tax cuts and personal income tax relief were his biggest challenges for 2018.
According to the budget the so-called "tax speed limit" does not come into force until 2020-21, when taxes reach the government's limit of 23.9 per cent of GDP and the economy reaches a 1 per cent surplus.
"We'll have to cut taxes more than we've already talked about over the medium term to ensure that line is realised," he said
Mr Morrison suggested personal income tax cuts or an adjustment of tax brackets could come as early as the May budget.
"I mean if you have an unconstrained tax environment the snake is eating itself from the tail," he said.
The Treasurer said the "whole government" has been frustrated by political upheaval that dominated this year, with the citizenship fiasco, same-sex marriage and the banking royal commission providing "quite a bit of distraction" from the country's economic performance.
"I think it's fair to say that many of the things we have been able to achieve this year would have gone unnoticed from an announcement point of view," he said.
"Same-sex marriage has been dealt with; the issue around the banks has been dealt with. A lot of the issues were out there creating a lot of noise and diverting attention from things that we were getting on with everyday.
"Next year if that dies down then the work we have been able to do on economic policy will be more evident."
He said he was particularly encouraged by signs of house prices easing in the Sydney and Melbourne housing markets.
"[We are starting to see] the return of belief for many young Australians in particular in Sydney and Melbourne that they felt they were losing when they looked at rocketing house price growth of 15-17 per cent," he said.
"Many had already lost hope and I think the action we have taken this year has made a significant impact on that, getting that tax cut through for first home super savers was a nice Christmas present for first home buyers."
With Tara Hayes