The government lost the company tax cut vote because they lost the company tax cut debate. They lost the company tax cut debate because they, and the section of the business community backing them, lost the economic debate. They lost the economic debate because they pursued such a narrow version of economic reform.

There are big, global economic issues of this generation that Australia must better grapple with. The very nature of the future of work in an age of automation; big data and AI; the energy revolution in an age of climate change and the growing curse of inequality – to name just a few.

Despite these huge economic challenges and opportunities, and all the business to government partnerships they must involve, corporate Australia teamed up with the current government to pursue the narrowest of reforms and one focused solely on them: a five percentage point tax cut on their profits. A wider program of reforms, in partnership with the community and workforce, was seemingly not entertained.

Backed by a series of interventions by business leaders and their lobby groups, government ministers failed to make their case that such large business tax cuts are good for the economy and that the benefit would somehow flow down to everyone else. But so-called trickle-down economics has been discredited and the global economic debate had moved on. The International Monetary Fund, the OECD even our own Reserve Bank of Australia were publicly advocating the need to tackle inequality and low wage growth. Hardly the usual suspects.

Simplistic arguments that large business tax cuts would “automatically” or “inevitably” lead to better outcomes for average workers has caused resentment in the community. We have all heard these arguments before but the benefits have failed to materialise. The claims expanded from wages growth to more jobs to increased innovation to better super to more foreign investment. The greater the claims, the less they were believed. The reality is that the economics of the policy are not settled. To repeatedly tell people otherwise came across as patronising and, for those looking closely, a long way from economic reality.

This was a debate about economic choices. If economists teach us anything it is that every decision has an “opportunity cost”. Every time we spend a dollar, we lose the opportunity to spend it elsewhere. This was strikingly true of the proposed company tax cut because of the scale and size of the fiscal outlay involved. The Australia Institute calculated that the big four banks alone would receive $9.5bn over 10 years if the tax cut went ahead. When fully operational the tax break would be worth $3.5bn to the banks every single year. This is billions that cannot be spent on science, 21st century infrastructure, apprenticeships and targeted investment tax breaks, all of which might have a better economic dividend.

In fact, because of Australia’s dividend imputation system, most of the benefit of the company cuts would flow overseas. Around 57% of the value of the ASX is held by foreign shareholders. They would receive the full benefit of the company tax cut. It is to them that the tax cut had most appeal. The government seemed to admit this during the debate, suggesting that the tax cut was needed to attract foreign investment to Australia. Yet there is little evidence that Australia has a problem attracting foreign investment. Indeed, our analysis shows that some of the biggest investors into Australia are from countries with lower corporate tax rates. They invest for many other reasons unrelated to tax rates – our stable democracy, the rule of law and our education system to name just a few.

There is a global debate raging about the disconnect between economic elites and vast sections of society. There is growing concern that many with wealth and power, often those with large business connections, are acting in their own interest. That too many businesses are seen to be avoiding tax and not contributing their fair share towards the costs of building and maintaining a decent society. It was against this backdrop that Australia’s business community launched a campaign, not for widespread tax reform that might have something in it for everyone, but a single tax cut whose benefits overwhelmingly would flow to a few very large corporations. To put it simply, business was seen to be acting in their own vested interest, rather than the national interest.

Australia needs a better and bigger tax and economic debate, one that involves a partnership with all sections of society. A bolder, larger set of reforms, precisely because they can be more inclusive and have a better chance of success than a economically and politically discredited single company tax cut.

• Ben Oquist is executive director of The Australia Institute