Millions of dollars of tax revenue could flow across the Tasman if the Australian government cuts its company tax rate.
The company tax rates in New Zealand and Australia at present are 30 cents in the dollar, but a review of the tax system in Australia could result in a lower rate there.
A member of the Tax Working Group, Geof Nightingale, recommends matching any cut in Australian company tax, otherwise, he says, Australian private equity firms could load up their investments in this country with tax-deductible borrowings, costing the Government millions of dollars in lost revenue.
Mr Nightingale says limits on foreign-owned entities' borrowing could be toughened, but that risks Australian finance to local firms drying up.
