4.13pm – May 5, 2016

James Eyers

National Australia Bank chief executive Andrew Thorburn said small business tax cuts are a "good place to start" on Thursday afternoon after releasing the bank's 6.5 per cent rise in cash profit to $3.3 billion in the first half.

"On the budget, what I have said before is we need to see a credible path back to surplus. It is really crucial that hard decisions are taken and we move through that. And whilst [the government] haven't got there in the estimate period, they are not far away," Mr Thorburn said.

"The tax system does need to continue to be overhauled to make it more competitive for a future growth orientated Australia and I think the tax system we have got is...outdated. We don't want piecemeal changes, but in this environment doing little things are good things.

"And I think targeting small business- they employ more people in Australia than any other level of business, they will create jobs they will invest - is a good place to start. It is really making it more competitive with the tax changes, and I think that is a positive thing."

In Tuesday's budget the Coalition cut the company tax rate from 30 per cent to 27.5 per cent for all incorporated business with a turnover of up to $10 million.