A call to arms for a capital incentive program

5 Sep 11

Machine tools are the building block of our economy. They are the “mother” of all machines. They make the machines that make the products that make our life what it is today.

Every manufactured product you can think of, from the contact lenses you put in the morning and the corn flakes you eat for breakfast, to the computer you use at work, the train home in the evening and the car waiting at the station, and even to the couch in front of the television at home – they are all made by a machine tool or by a machine that was made by a machine tool.

The need for investment in technology and innovation has been widely documented and I doubt you will get much argument about this from most manufacturers. Whilst we continue to be globally competitive in the design and manufacturing of products, we are slowly falling below par in our investment in technology.

The GFC, interest rates, access to finance, order uncertainty and the carbon tax have all played a role in creating an environment where confidence and willingness to invest is being eroded. We need strong leadership to address this issue.

The government has an important role to play in reversing this trend. Encouraging investment in new technology is essential if Australia is to keep pace with international competition. We need a major incentive program developed, and quickly.

We have reached a critical time and we need to implement some measures now. Accelerated depreciation has proven in the past to be an effective stimulus for investment. Shane Infanti, AMTIL CEO says "I would like to see serious consideration given to the short term reintroduction of this process. Either that, or an investment allowance on new plant and equipment combined with a two year reduction on fixed interest rates".

The key issue here is time. We need measures implemented yesterday. We simply cannot keep avoiding the topic and continuing to hope that the issues I have mentioned above will fix themselves.

Editorial Comment by AMTIL CEO Shane Infanti in the September Edition of AMT Magazine