Australian food manufacturing seeks investment tax break
The Australian Food and Grocery Council (AFGC) is asking the Federal Government to increase investment tax breaks for Australian food manufacturers despite international trade, employment and productivity growing within the food industry.
Announcing the release of the AFGC’s 2015 State of the Industry Report, CEO Gary Dawson said capital investment was an area of concern.
“One area of weakness exposed in the State of the Industry 2015 report is capital investment, which is falling at a time when a lift in investment is vital for the Australian food and grocery sector to scale up and meet the opportunities of the future,” said Dawson.
“Future growth to fully capitalise on improved market access and growing demand from middle class consumers in the emerging economies of Asia and the Middle East will require a step change in investment in the food and grocery sector,” Dawson continued.
The drop in capital investment contrasts against the increase in industry employment, international trade and productivity.
Direct employment for 2014-15 sits at 322, 900, up one per cent on the last period. Total export trade for 2014-15 was $61.7 billion, up 12 per cent. Labour productivity for 2013/14 grew 2.4 per cent.
“Food and grocery processing makes up almost one-third of Australia’s manufacturing sector and it is encouraging to see growth in both industry turnover and jobs,” said Dawson.
“An extra 3,183 jobs were created last year to bring direct employment in the industry to 322,000, with 41% of those in rural and regional Australia,” he said.
“Growth prospects for the future are strong, reflected in surging food exports in recent years. In 2014-15 processed food and beverage exports were up 28% or almost $6 billion to $26 billion and the trade surplus almost doubled to $10 billion,” Dawson continued.
“The falling Australian dollar and improved market access flowing from trade agreements are improving the competitiveness of Australian food and beverage exports in key markets, and along with Australia’s reputation for safe, high quality food this is driving export growth,” he concluded.