The steel and metals sector wants all new resource and infrastructure projects worth more than AUD 100 million to be required to take more Australian content and in return get tax breaks, including on the controversial minerals resource rent tax.
In its submission to this week's tax forum in Canberra, the Australian Steel Institute says the investment boom in resource projects is not being shared by the metals, fabrication and machinery sector. It is under siege from a high Australian dollar and cheaper overseas suppliers, and needs better tax concessions and discounts on the MRRT to offset increased costs of using local supplies. The Institute also wants accelerated tax depreciation on projects assets.
The Australian Steel Institute said that "We do not believe tax reform should be used to subsidize inefficient industries, but to create a level playing field where efficient companies can compete during a period of artificially high exchange rates and crowding out in the non resource industries. Once an industry is dismembered, it is very difficult to put it back together again."
The project owners and their contractors would need to meet to set criteria about Australian content as a precursor to approval by bodies such as the Foreign Investment Review Board. The steel institute did not propose any measures that would contravene World Trade Organisation guidelines or principles.
Another industry weathering the storm of a high dollar is tourism, which accounts for 9% of export earnings. The Tourism and Transport Forum submission also pushed the steel industry's idea of accelerated tax depreciation, this time to boost new tourism ventures and refurbish existing ones.
The Tourism and Transport Forum chief executive, Mr John Lee, said one of the main reasons Australians shied from domestic travel was the lack of investment.
He said the capital works depreciation regime applying to tourist accommodation, where a building was written off over 25 years, did not reflect the reality that hotels had a shorter operational life. He called for an additional 50% deduction bonus as a short term incentive for three years, with the remaining balance spread over 12.5 years.
(Sourced from www.theage.com.au)
