Tuesday, June 25, 2024

Tax incentives welcomed by AFGC

Opposition leader Bill Shorten has announced the Australian Investment Guarantee, which will provide targeted tax incentives for Australian industries and Australian jobs.

The Australian Food and Grocery Council (AFGC) has welcomed the announcement, with CEO Tanya Barden saying the announcement is in line with what the AFGC has been proposing to address – declining investment and international competitiveness in the $127 billion food and grocery sector.

“Continuing to stimulate investment in site modernisation is critical, particularly in light of mounting input-cost pressures,” Ms Barden said. “We’re now in danger of drifting into a low-investment trap, where uncertainty about return on investment flowing from retail-price deflation and rising costs are seeing investment decisions deferred or dumped.”

According to Ms Barden, the AFGC recommended in its 2017-18 pre-budget submission that a targeted investment allowance is adopted to bring forward local investment, and retain Australian jobs and businesses, especially in regional areas where about 40 per cent of the industry’s jobs are located.

“Recent growth in food imports has highlighted the declining global competitiveness in the Australian food and grocery sector, due partly to industry placing increased reliance on dated machinery and equipment,” Ms Barden said. “This initiative will go a long way to encouraging investment in high-tech and high-skilled projects to enhance efficiency and increase scale.

“We’re particularly supportive of the Australian Investment Guarantee’s inclusiveness across the industry sector. The opportunity to use this Investment Guarantee towards energy saving projects is also very important.”

Ms Barden noted that Australian food and grocery is the country’s largest manufacturing sector and employs 2.6 per cent of the national workforce.

“Stimulating investment is critical at a time when a step change upwards in investment is required to fully capitalise on improved market access and growing demand from middle-class consumers in the emerging economies of Asia and the Middle East.”

“We welcome an ongoing focus on the fundamentals for continued growth, including creating an environment conducive to higher business investment, with reduced red tape and other initiatives that will encourage jobs and growth.”

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