Tax changes could support manufacturing investment – Husic

The minister for Industry and Science Ed Husic has raised the issue of changes to the corporate tax system or investment allowances as a way of boosting flasgging investment in manufacturing.

Speaking at The Australian Financial Review AI Summit said the government had a challenge to confront.

Husic said: “We have got to urgently review the tools, the machinery, that supports our industry base if we want to achieve our ambitions.

“And today the retirement of manufacturing assets in Australia outpaces the investment required to replenish it, the capital stock diminishing by $190 million (sic) over 10 years.

“Our manufacturing assets are getting older, the average age of capital rising from 11 to 13 years over the same 10-year period. We have got to turn this around, and investing in technology like robotics and automation is part of the solution.”

However Husic said he needed to be very careful about what he said about taxation reform ‘because I’ve got a cabinet colleague in the form of the Treasurer who manages the tax revenues, and so I think I might try and get the balance right, if you don’t mind’.

Husic said he was raising the issue around ageing manufacturing capital stock because Australia needed to confront that.

“Talking about company tax has been a challenge in times past, largely because people felt that, where profits pre-pandemic were performing quite well and wages were stagnating, that it was really tricky to be able to have that conversation.

” That’s why you saw the talk of corporate tax reform under the Coalition go nowhere.”

Husic said the government since it was elected has worked hard in a number of ways, including lifting low paid wages.

“It’s been about improving people’s wages, their conditions, their security at work, thinking ahead about automation and transforming the nature of the conversation that we’ve got.

“I believe in the strongest Labor traditions, we need to be able to bring business and labour – l.a.b.o.u.r – together and show that everyone wins.”

Husic said that was the hallmark of previous Labor governments.

“We need to consider that, how we do that, either through corporate tax reform or the way in which we provide investment allowances for the uptick in manufacturing capital, that is something long term.

“I think that does need to be considered, and we’re probably in a better space to consider that because of some of those things that I’ve mentioned before.

“We need to see business be able to invest and to free up capital to do that.

“And if they’re committed to do that, then be able to see that enabled, but having done that too in a way where we see people’s wages and their security or employment improve.

“…Any discussion around corporate tax reform needs to be able to entwine both the benefits for capital and for labour; to be able to have that successful discussion. I think that’s where we probably will be likely to head.”

Picture: Ed Hisic