The Australian Advanced Manufacturing Council (AAMC) on 27 March urged Federal Senators to support the proposed ten-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,” said John Pollaers, Chairman of the AAMC. “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.  We urge the Senate to support the changes.”

Pollaers argued that defining small enterprises as those with turnover under $2m a year is seriously out of step with the rest of world and significantly limits Australia’s potential.

“Of course billion-dollar operations are not small businesses,” he said. “But in global terms, we’re talking about micro businesses when we talk about even $10m annual turnover, much less $2m. The Government’s proposal to raise the small business threshold to $10m will add an estimated 60,000 businesses to the existing 810,000 businesses in the small business category.

“Those additional 60,000 businesses employ an estimated additional 1.5m Australians. This is almost doubling the number of employees – to an estimated 3.4m Australians – whose enterprises will be given full and reasonable benefit from ATO allowances for small business.”

In the EU, a small business is defined as one with 50 employees and an annual turnover of €10m ($15m) or less. In the US, a small business employs up to 500 employees.

“For advanced manufacturers seeking to become global suppliers, scale is an issue,” said Pollaers. “Their global customers must have trust in their viability in the long term. 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.

“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.”