Rio Tinto chief executive Sam Walsh says Australia should aim to adopt Asia's average corporate tax rate of about 21 per cent, because the local system has "fallen out of step with the rest of the world". 
Speaking on Wednesday night, Mr Walsh said Asia's average tax rate was a "worthy goal" for Australia, rather than "a theoretical OECD or European average". It would continue Australia's "pivot" towards Asia, he said.
"When 10 of Australia's 125 taxes and levies generate 90 per cent of the revenue it begs the question: what are the other 115 doing to competitiveness and entrepreneurialism?" he said in a speech to Melbourne University.
The best way to support new start-ups and investment is a lower corporate tax rate, he said.
Australia's tax system has fallen out of step with the world - given the cuts other countries have taken in the past decade. New Zealand by 5 percentage points, South Africa by seven, the UK by nine and Canada by almost 10.
"As a suggestion look closer to home, to Asia," he said. "If Australia looks to the future and to its region - the average corporate tax rate in Asia is closer to 21 per cent, a worthy goal to consider."
"With a small population, Australia has always depended heavily on overseas capital and it faces steep competition to attract it."
Mr Walsh, who was at the recent G20 talks in Turkey, said the benefits of free trade were "not always understood or well appreciated".
"Australia should look to embrace these [free trade] opportunities with China, India and SE Asia as it did many decades before with Japan and Korea."
"Thankfully most of the xenophobic-tinged complaints have now been overcome."