The bosses of two large companies have poured cold water on the federal government's broader push to drop corporate tax rates but backed the policy to cut rates for smaller companies.
Federal treasurer Scott Morrison on Wednesday mounted a "blitz" in South Australia in an attempt to put pressure on independent senator Nick Xenophon over his opposition to corporate tax cuts.
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Telstra chairman John Mullen is asked how Asciano Limited- a company where he previously was CEO- will explain why it will not pay any tax due to debt deductions at Wednesday's Australian Financial Review & J.P Morgan Chanticleer Lunch event.
Telstra chairman John Mullen said there needed to be a bipartisan position on tax reform otherwise "we are just kidding ourselves because we're not going to get there".
"Trying to sell to the ordinary person in the street that if you reduce the tax for large corporations in 10 years' time it's going to give them an economic benefit is just unsaleable in today's populist world," he told The Australian Financial Review's Chanticleer lunch in Melbourne on Wednesday.
"It may be the best economic theory that there is but I don't think it will wash with a sort of Trump-Brexit type voting reaction to things being done by government and business."
Mr Mullen did say he thought the government's proposal to offer tax cuts for companies with revenue below $50 million was a good idea.
Virgin Australia and IAG chairman Elizabeth Bryan was also equivocal about the value in chasing a broad company tax cut.
"I am a bit ambivalent about this question," she said.
"Is a drop in the tax rate going to automatically fix the country, fix the budget and make everyone happy? It's an open question in my mind."
Mike Fitzpatrick said the nation's system of franking credits and dividend imputation might be a better target for reform given the desire for Australian companies to target investment from offshore.
"Franking credits are a beautiful, fair, elegant concept ... [but] if we are looking to grow companies overseas it is potentially quite difficult and damaging," he said.
"If we are looking at having more champions in Australia like CSL, I think it is going to be increasingly difficult."
Ms Bryan agreed, saying that as a capital-importing country that would encourage offshore investment.
"So it had its purpose when it was introduced, whether that purpose still really exists now and is strong as it used to be given where we are going to go with foreign investment, I'd put a question over it," she said.