Australia’s largest biotechnology company, CSL, has urged the Federal Government to consider a more competitive corporate tax environment, such as an advanced manufacturing tax directed at new investment.
According to CSL, a more competitive corporate tax rate will enable Australia to convert world leading research and development into fully fledged advanced manufacturing industries. These are the conclusions outlined in CSL’s submission to the Government’s “Re-think” tax discussion paper.
The company’s Chief Financial Officer, Gordon Naylor, said that the modified tax would not reduce Treasury revenue since Australia was not attracting that type of investment.
“CSL is currently investing in Australia for some of our existing products, which reflects CSL’s strong Australian skills base. This is largely contract production in support of existing facilities using existing Intellectual Property from elsewhere in our international supply chain. Much greater taxable profits, new jobs and economy-wide supply linkages could be generated if companies established in Australia entirely new global production facilities capitalising on IP developed or enhanced in Australia,” said Mr Naylor.
The introduction of an “advanced manufacturing tax” is set to boost Australia’s competitiveness on a global scale and advance domestic manufacturing.
“Australia possesses excellent universities and a highly effective research sector, in large part as a result of governments’ policies and support. It’s clear that we need to look at our tax competitiveness if we want to take the next step to build the advanced manufacturing, to commercialise our innovations, and to knit Australia into global supply chains,” Mr Naylor said.
“CSL is Australia’s largest home-grown advanced manufacturer. We’d like to do more in Australia and we want to see Australia perform to its potential. Because we operate globally we know what’s required if Australia wants to be a serious advanced manufacturing player.”
CSL built a $500 million manufacturing plant in Switzerland where it produces its synthetic and enhanced versions of the body’s own blood clotting agents due to its lower company tax rate – 18% compared with Australia’s 30% for large companies.
CSL’s proposed advanced manufacturing tax rate of 10% would apply only to companies that meet strict conditions, such as investing in new manufacturing facilities and continuing to manage intellectual property in Australia.
Click here to read CSL’s submission to the Treasury response to the “Re:think” tax discussion paper.