"Tax reductions are desirable provided they are affordable," he wrote. "But I would never have countenanced a $50 billion impost on the budget balance with a discretionary unfunded tax cut." Paul Keating at Labor's campaign launch in western Sydney. Credit:Alex Ellinghausen Mr Keating said the financial impact of the tax cuts, to be phased in over 10 years, would be "massive". Government ministers have been keen to cite Mr Keating's previous support for company tax cuts when he was in office, arguing that Labor had abandoned its zeal for pro-market reform under Bill Shorten. Prime Minister Malcolm Turnbull invoked Mr Keating's reforms during the Facebook leaders' debate last week, and Finance Minister Mathias Cormann on Thursday named Mr Keating among a number of Labor figures whom he said would back the tax cuts "in their heart of hearts".

In editorials, newspapers such as the AFR and The Australian have also implied that Mr Keating would have supported the Coalition's plan. Paul Keating cut company taxes when he was treasurer under Bob Hawke, and when he replaced him as prime minister. Credit:Peter Morris Instead, the former PM's letter validates shadow treasurer Chris Bowen's view from earlier this month. "Keating would never endorse an unfunded corporate tax cut because he never regarded this approach as affordable reform," Mr Bowen wrote. In his letter, Mr Keating accused the AFR of quoting him out of context, and of colluding with the Business Council of Australia in a "camouflaged attempt to reduce the rate of company tax on foreign shareholdings". "The AFR must be alone among national financial newspapers in urging so massive an impost on the national fiscal balance," he wrote. The Turnbull government wants to cut the rate of company tax to 25 per cent by 2026/27, starting with small businesses of less than $2 million turnover and gradually extending the lower rate to all businesses. Labor supports tax cuts for the smallest businesses only.

Mr Keating has remained relatively silent in the election campaign. He attended Labor's official campaign launch at the weekend but did not make a speech. His intervention comes as the major parties assemble their pitches for the final week of the campaign. The Coalition is emphasising its enterprise tax plan as a bedrock for jobs, growth and stable government. Labor is spruiking health and education, while painting the proposed tax cuts as unfair. Opposition Leader Bill Shorten said the letter put the kibosh on Malcolm Turnbull's "spurious" and "dishonest" attempt to pass himself off as "Paul Keating-lite". "He is nothing like Keating," Mr Shorten declared on Friday. But an undeterred Senator Cormann said Mr Keating's true feelings about company tax cuts should be judged by his record, not by his words. "Don't look at what Paul Keating says eight days away from an election campaign, where as a senior Labor figure he is backing a senior Labor figure," Senator Cormann said.