Tax changes needed to help grow Australian manufacturing: AAMC
The Australian Advanced Manufacturing Council (AAMC) urged Australian Senators to support the proposed 10 year enterprise tax plan as a vital step in supporting Australia’s manufacturing future.
"Australian manufacturers are succeeding in the face of tough conditions globally but our policymakers must stop putting roadblocks in their way," Chairman of the AAMC, John Pollaers, said recently.
"In order for Australian companies to compete globally, they have to grow in scale, and they have to be right at the cutting edge of their fields.
"These company tax cuts are critical for manufacturing," he said. "We urge the Senate to support the changes."
"Defining small enterprises as those with turnover under $2 million a year is seriously out of step with the rest of world and significantly limits Australia's potential," he said.
"Of course billion-dollar operations are not small businesses.
"But in global terms, we're talking about micro businesses when we talk about even $10 million annual turnover, much less $2 million," he said.
"The Government's proposal to raise the small business threshold to $10 million will add an estimated 60,000 businesses to the existing 810,000 businesses in the small business category," Pollaers said
"Those additional 60,000 businesses employ an estimated additional 1.5 million Australians," he said.
"This is almost doubling the number of employees – to an estimated 3.4 million Australians – whose enterprises will be given full and reasonable benefit from ATO allowances for small business," he said.
In the European Union, a small business is considered one with 50 employees and an annual turnover of 10 million Euros or less (AU$15 million); in the US, a small business employs up to 500 employees.
"For advanced manufacturers seeking to become global suppliers, scale is an issue," Pollaers said.
"Their global customers must have trust in their viability in the long term," he said.
"Ensuring smaller entities gain full and reasonable benefit from ATO allowances for small business simply supports their growth and continued viability into the future – and allows Australian companies to operate on a more level playing field with their overseas competitors," Pollaers said.
"Australian advanced manufacturers are achieving great things in the face of intense global competition. But the conditions are tough.
"Right now, significant technological shifts are occurring in manufacturing: commercial applications for artificial intelligence and machine learning are expanding; we see robotics entering a new phase; significant advances are occurring in nanotechnology, 3D printing, genetics, biotechnology, chemistry and materials science.
"Lowering the corporate tax rate over time is a positive support for the ambition of many of our small businesses to become medium-sized – and even large-sized," Pollaers said.
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