But Mr Bowen pointed out that the dividend imputation system, which credits Australian company tax paid for Australian-resident shareholders, reduces the effective company tax rate for them.

Business groups point out that this does not apply to foreign shareholders or foreign taxes paid by Australian companies, which makes Australian investors and companies more domestically focused and insular.

Mr Bowen said he wasn't advocating getting rid of the hugely popular dividend imputation system, just that it had to be noted in debates about the company rate.

The Australian Tax Office estimates imputation reduces the effective company tax take by about a fifth.

Chris Bowen said Labor was prepared to negotiate on cutting the company tax rate. Louise Kennerley

Asked what a Labor government would do to spur innovation and economic growth, Mr Bowen said Labor would not entertain "Laffer curve" calculations that tried to bank revenue increases from tax cuts up front.

But he said "clearly you can have over time a move towards a more competitive system in corporate tax".

"It'll take time and it'll take tough decisions," he told the AFR Tax Summit in Sydney.


Asked by the Tax Justice Network's Mark Zirnsak whether Labor would also take steps to prevent high income earners from corporatising to reduce their tax rate, Mr Bowen said he did not see any need for special anti-avoidance measures over and above the tough measures already in place.

"I am stating as a matter of principal that you'd like to see the corporate tax rate come down over time. I don't think it creates avoidance problems. Generally there are pretty of robust anti-avoidance measures in place."

He said Labor would have to be convinced of the need for specific measures to counter avoidance via corporatisation.

"Where possible I like to rely on general anti-avoidance measures."

However, as reported in Tuesday's AFR, Mr Bowen ruled out any increase in the GST rate or broadening of the consumption tax's base, leaving unanswered the question of where a Labor government would raise the revenue​e to replace a reduction in the company tax rate.

With economic growth stalling in the wake of the collapse of the mining boom, economists say Australia needs supply side reforms to boost entrepreneurialism, innovation, growth and job creation.

Prime Minister Malcolm Turnbull has declared that these will be priorities for the coalition government as it heads for an election next year, and that all options for tax reform – such as raising the GST – are now back on the table.