The Senate Economics Reference Committee has heard how innovation is the key to the future of Australian manufacturing, during a presentation in Brisbane last week
The Committee heard verbal submissions for the Inquiry into Australia’s Innovation System, which were presented by medical device manufacturer Cook Medical Australia, with the submission made by Mark Muller- the Director of Finance of Cook Medial Asia Pacific.
Mr Muller expressed his concerns to the Committee about the future of Australia’s manufacturing industry.
“It’s our strong view that innovation and manufacturing are inextricably linked,” he said.
“However, the precarious state of Australia’s manufacturing industry, struggling with comparatively high taxes, high labour and operating costs, is of particular concern for the future of Australia’s innovation system,
“To maximise Australia’s capability to innovate and to become a knowledge-based economy, there is a need for structural change within policy frameworks to attract business and commercialisation of our innovations back to Australia,
“Without this, the intellectual property, manufacturing and all the associated jobs will leave our shores, it’s the Australian future for companies like Cook Medical.”
Mr Muller urged the Australian Government to implement a new tax incentive as a way to help boost the country’s manufacturing industry.
“The Government must do something to help the retention of domestic manufacturing and industry,” he said.
“Our recommendation is to consider the implementation of a ‘patent box’ style tax incentive for Australia, specifically a model that would provide a reduction in the tax payable on profits derived from the commercialisation of qualifying IP in Australia, either via licensing or manufacturing and sale of products incorporating qualifying IP.”
Under the tax incentive model, dubbed the Australian Innovation & Manufacturing (AIM) Incentive, qualifying IP profit would be taxed at the lower rate with the standard corporate tax rate to be applied to other income, ensuring Australia benefits from investment in any R&D by encouraging companies to locate all the activity of the IP within Australia.
Mr Muller told The Manufacturer that Cook Medical Australia was committed to a sustainable future for Australian manufacturing.
“We have a vested interest in anything to do with manufacturing that will actually mean there will be a future of manufacturing for our children and grandchildren and give them a huge range of options,” he said.
“It’s actually having the base in Australia which will allow us to not only develop innovative products, but make the prototypes, make the products and get it to market not just write papers about it.”