New research ridicules the Prime Minister's claim that cutting the company tax rate will boost foreign investment, pointing out that almost all of Australia's foreign investment applications already come from countries with much lower tax rates.

The analysis by the Australia Institute finds that 97 per cent of the applications to Australia's foreign investment review board come from countries with lower company tax rates. By value, 71 per cent of applications come from countries with lower rates.

"All of this raises the question – if Australia is already successful at attracting foreign investment why would we give tax cuts to foreigners?" said the report's author David Richardson, a senior research fellow at the self-described progressive think tank.

"History shows that when Australia's company tax rates were adjusted in the past, foreign investment did not go the way expected. When the rate climbed to 49 per cent in the 1980s there was a rise, not a drop in investment."