A lower corporate tax rate is not the "silver bullet" that will slay Australia's low-growth gremlins, the Reserve Bank says.
Deputy RBA governor Philip Lowe says lowering corporate tax rates to match other countries is not central to stimulating business activity.
"I think probably at the margin you could argue that but I think it would be incorrect to focus on corporate taxation as the solution here," Mr Lowe told a House of Representatives economics committee hearing on Friday.
"There isn't a single solution, it's working across a whole range of areas to create a pro-investment climate."
RBA governor Glenn Stevens and deputy Philip Lowe before the house economics committee in 2015.Credit: Alex Ellinghausen / Fairfax
Mr Lowe said investment is low in all the advanced economies and it would be advances in technology that will drive increases in living standards.
Meanwhile, Reserve Bank of Australia governor Glenn Stevens told the committee that Australians had voted for the government to give them nice things but hadn't decided how they will be paid for.
Amid concerns about the possible dampening effects of income tax bracket creep on people's incentive to work, Mr Stevens told the committee the nation was yet to have a conversation about the right level of personal tax to pay for government services.
"We've all voted as voters for the government to give us good things. We have not actually voted for the funding," Mr Stevens said.
He said the funding gap was not "disastrous" and "we're not heading to hell any time soon" but the nation's political leaders had to engage with the community about the appropriate level of tax relief average income earners could expect.
The RBA also downplayed the significance of apparent weakness in business investment outside the mining sector.
Mr Stevens said that capital spending outside the mining sector was "considerably weaker" than he would have forecast two or three years ago.
And while "animal spirits have improved a bit", there was little sign of any intention to invest more, he said.
"Though when I look at what the economy's actually done, it seems as though we've been generating more jobs growth than we would have thought," he said.
This was despite reservations about recent problems with labour force data.
"So somewhere there's economic activity happening, demand occurring, that's in some expenditure component somewhere, I'm not quite sure where, and it didn't require a pick-up - so far, anyway - in non-mining investment."
That outcome was surprising, but pleasing, Mr Stevens said.