THE Gillard government has reinstated its promise to cut company tax but says business must work out how to fund it so there is no effect on the budget bottom line.

And job agencies will be rewarded for finding jobs for people interstate to help combat labour shortages in areas of high demand, such as the mining sector.

Wrapping up the one-day economic forum in Brisbane yesterday, the Prime Minister, Julia Gillard, said the government's Business Tax Working Group, an expert body established last year, must come up with a funded company tax cut as an ''absolute top priority''.

Economic development... Prime Minister Julia Gillard promises to make cuts to company tax a "priority".

Economic development ... Prime Minister Julia Gillard promises to make cuts to company tax a "priority". Photo: AFP

It has until the end of the year to report, raising the prospect of a company tax cut in next year's pre-election budget.

In this year's May budget, the government abolished the promised 1 percentage point company tax cut that was worth $4.7 billion over four years and was to be funded by the mining tax.

The Greens and the Coalition would not pass the legislation so the government redirected the money towards cost-of-living help for low- and middle-income families.

The business community was angry and Ms Gillard sought to to bury the hatchet yesterday.

''We heard you loud and clear on the company tax rate and we see it as a priority in the next steps on tax reform,'' she said.

Ms Gillard did not specify the size of the cut but said it was up to the working group to nominate a cut that could be funded.

The Prime Minister said it must be funded by reforming other business taxes and not, as business groups have demanded, an increase to the GST or a broadening of its base.

Seeking to address the problem of labour mobility, Ms Gillard said her government would also offer incentives to job agencies which find positions interstate. Currently, the job network rewards agencies for finding people jobs in their local area. The commitment will appease unions angry at the resort to imported labour to help build large mining projects.

Business was surprised by the tax-cut commitment given tax reform was not even listed as an item for discussion.

The chief executive of the Business Council of Australia, Jennifer Westacott, told the forum the company tax commitment was welcome. ''But it will stand for little if it is not part of broader tax reform that delivers a net benefit to business right across the economy,'' she said.

The need to lift productivity created a frisson between unions and business groups before the latter agreed cutting wages and conditions was not a solution. The governor of the Reserve Bank, Glenn Stevens, told the forum that lifting productivity was the nation's ''biggest challenge'' and the recent slowdown could not be blamed on the mining sector's huge investments, as has been cited by the government.

Mr Stevens said there had been a material slowing in productivity over the past six to eight years and ''if you take mining out you still get this story''.

He said the Productivity Commission had a long list of ideas, many of which were controversial and politically fraught, but he said that list should be considered.

One idea floated by the commission was eradicating industry assistance but the Treasurer, Wayne Swan, would have none of it, saying investments in infrastructure, skills and education, and regulatory reform were preferred options.

Mr Stevens said lifting productivity would help combat the deleterious effects of the high dollar on business.

But he also spruiked the benefits of a high dollar and said people should be careful about wishing it to fall because every time someone put petrol in the car, bought an imported good, or travelled overseas, the high dollar was benefiting them.

The mining boom has contributed to the high dollar and Mr Stevens said this was a spinoff of the boom for consumers.