One of Ronald Reagan's most controversial economic advisers has been flown to Australia to promote the idea of lower taxes to political and business audiences just two months before the Abbott government's second budget.
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Dr Arthur Laffer - whose ideas inspired the Reagan and Thatcher revolutions in the 1980s - has come at the behest of the Australian Chamber of Commerce and Industry, which is one of the loudest proponents of lower corporate tax rates in Australia.
Kate Carnell, ACCI chief executive, said on Monday that Mr Laffer's "economic acumen" and influence in triggering a "world-wide tax-reform movement in the 1980s" could provide valuable lessons for Australia, and his analysis went to the heart of the economic debate about what it meant to stimulate an economy and the source of economic growth.
This debate needs to be held ahead of the Abbott government's white paper on tax reform, she said.
"It may seem counterintuitive, but in some cases lowering tax rates can ultimately lead to more tax revenue for government through stronger economic growth," Ms Carnell said in a statement on Monday.
"It's time to move the debate to a pro-growth and free enterprise agenda, where we can increase the total size of the economic pie, not just focus on how we carve it up."
In the early 1970s, Dr Laffer famously drew a small economic model on a napkin in a Washington restaurant for Ford Administration officials Dick Cheney and Donald Rumsfeld to explain why government revenue will fall if tax rates are too high.
That model - since dubbed the 'Laffer Curve' - has become one of the most contentious ideas in modern economics.
Its crucial point is that raising taxes may diminish government revenue rather than increase it, and that if you want to boost revenue you should actually cut taxes. Lower taxes will stimulute economic activity and boost employment and improve tax receipts as a consequence, it shows.
Dr Laffer told Fairfax Media on Monday that Mr Fraser was right to look to that era for good ideas.
"I don't know him, but he's exactly on the right track," Dr Laffer said.
"Anyone who learns political economics from the Reagan era is learning the right lesson. You cannot tax an economy into prosperity, it's stupid. And stimulus spending is dumber than that."
In a wide-ranging interview on Monday, Dr Laffer was scathing of the Bush and Obama administrations, laying the blame on them for the financial crisis, saying the recession would not have been as deep if they did not pursue stimulus spending.
"The reason the Great Recession occurred was because of the stimulus spending, not in spite of it," he said.
"We had the first stimulus package in 2007 with the housing bill and the agricultural bill, then we had the Bush US$700 billion stimulus, then we had the US$864 billion package from Obama ... all of those programs added to about US$3.75 trillion. That's about 1.75 years worth of tax revenues. But you tell me what happened to the US economy. We had the second-worst economy in US history, preceded only by the Great Depression."
"If Bush and Obama had not done those stimulus packages, and had not done Quantitative Easing [programs] and 'Operation Twist', we would have been over the Great Recession in the matter of a year and we would be having a boom today, just like we did in 2000."
Dr Laffer will be speaking to the Sydney Institute and the Institute of Public Affairs this week.
