The figures show 51 per cent of businesses banked the cash, 27 per cent lifted their investment, 19 per cent hired more workers, and 3 per cent raised wages. The average tax cut was worth $2940. The Turnbull government has argued that expanding the tax cuts will lead to increased investment, greater employment and higher wages, and are urgently required to keep Australia internationally competitive. But the analysis by AlphaBeta founder Andrew Charlton found evidence the 2015 tax cuts had not lifted wages. He compared the accounts of companies just below the $2 million threshold with those just above to develop a sample that represents more than 90 per cent of incorporated businesses in Australia. "It definitely tells us how a set of companies responded to tax cuts. The thing that we are seeing is a jobs impact but we are clearly not seeing a wages impact," said Dr Charlton, who served as former prime minister Kevin Rudd's economic adviser.

The report cautioned tax cuts can affect wages indirectly through labour market adjustments, which may take more than two years to mature. The research found firms with a turnover of between $1.5 million and $2 million increased their investment by 2.45 per cent, while firms that did not receive the tax cut lifted investment by 1.53 per cent. It noted business investment can lead to higher employment and wages over time. The next tranche of the federal government's tax cuts to 27.5 per cent for businesses with a turnover of up $50 million will begin rolling out this year. However the plan to gradually lower the rate for larger Australian businesses - at a cost to the budget of $36.5 billion - is stuck in the Senate.

Loading Replay Replay video Play video Play video The research is expected to be closely studied by crossbench senators yet to be convinced to vote for a tax cut for big businesses. On Wednesday, Labor leader Bill Shorten said corporate tax would "be the clear-cut question which decides the next government," as both parties move into election-mode ahead of a poll before May next year. Dr Charlton said while the findings did not dictate how larger companies would spend tax cuts, the granular data had significant implications for assessing the merits of future tax cuts. "There has been so much noise, so much opinion and not very much fact. What I hope this does is that it shifts away from the politics towards the evidence," he said.

AlphaBeta found 34 per cent of a further 500 businesses it surveyed had no idea they had received a reduction in their company tax rate, reducing the potential political benefits of the tax cut and suggesting the Coalition has more work to do to sell the policy. John Ross from the Lonsdale Street Cyclery Credit:Alex Ellinghausen The Australian findings come as new evidence suggests US President Donald Trump's company tax cuts are yet to have the investment effect predicted, as once loud proponents grow sceptical over their merits. Florida Republican Marco Rubio said corporations had “bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker”. On Wednesday, Apple became the latest US giant to reward shareholders, buying back $100 billion worth of shares on the back of the tax cuts.

John Ross, who owns Canberra's Lonsdale Street Cyclery, said he could understand why some businesses would hold the cash back in reserve. "But if you are not going to invest, you are not going to grow," he said, adding he would hire more staff to stave off online international competition for the bike retailer. He said he was pro-company tax cuts, as long as the proceeds were put back into the community. "If we have more people on bikes it saves the government spending money on health," he said. "I'm not sure it works the same way with pubs."