Australia’s investors want the next budget to return immigration to normal levels and introduce a tax rebate for software and digital capability investments to help companies stay competitive in global markets.
The Australian Investment Council (AIC) this week released its pre-budget submission calling for changes to immigration with new visas and relaxed border controls, tax credits and NBN upgrades to build digital capability, and investment capital reforms that would introduce collective vehicles. It also wants government to speed up foreign investment reviews.
The group, representing Australia’s private equity, venture capital and private credit funds, as well as institutional investors and financial advisers, had immigration at the top its budget wish list.
The AIC called for border controls to return to pre-pandemic levels “as soon as possible” and for a new visa for foreign students graduating Australian universities in areas of skill shortages, allowing them to stay and work in Australia.
“Australia’s economy relies on a dependable and steady flow of non-citizen skilled migrants, tourists and students to drive economic growth, consumer spending and job creation, so it is critical that visas and skills lists focus on expediting immigration that will fill skills and jobs gaps where they are most needed,” said AIC chief executive Yasser El-Ansary.
Increased skilled migration should be complemented by incentives for regional investment and better STEM and digital technology education in schools, according to the submission.
The outgoing AIC chief of nearly a decade said the federal government also needed to ensure the digital infrastructure and capabilities are in place for Australian businesses to stay productive and competitive.
“We are recommending a simpler direct additional tax credit is introduced to enable Australian companies to retool through investment in software and other digital capabilities,” Mr El-Ansary said.
The wide ranging submission, covers areas from housing process to clean energy to corporate and income tax reform, and includes the council’s ongoing call for long promised collective investment vehicles.
The vehicles give investors more favourable tax treatment and their absence in Australia makes it harder for local companies to attract global capital, according to the AIC.
The AIC wants the government to fast track the implementation of the new Limited Partnership Collective Investment Vehicle (LPCIV), which has seen half a decade of consultation and was promised to be introduced by 2018 by the federal government.
But the government has not directly addressed the delay in recent budgets and the status of an LPCIV regime remains unclear, according to the AIC.
The council also called for the existing early stage venture capital limited partnership (ESVCLP) and Venture Capital Limited Partnerships (VCLP) vehicles to be improved as a priority.
The group also flagged process improvements at the Foreign Investment Review Board to speed up application times, which is also seen as a potential deterrent to overseas capital.
Investors are also asking the government to consider a tax credit or instant asset write-off for expenditure on improving cyber-security capability, the planned patent box to be extended to many more areas, less red tape for investment in green technologies, housing affordability measures, as well as supply chain infrastructure and oversight improvements.
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