Evaluating the tax incentives for foreign investors policy
Evaluating the tax incentives for foreign investors policy
Reporting to the Manufacturers league
Executive Summary
This report has been written in response to the government’s proposed tax incentive policy for foreign multi-national corporations to increase foreign direct investment within Australia.
The report draws attention to the reasons behind the government’s proposal. These include the slow growth trends of the manufacturing industry, restoring the dropped level of foreign investment caused by the global financial crisis as well as a desire to increase levels of employment within the manufacturing sector.
It continues by drawing attention to the resultant competitive issues that may be caused by such a move as well as issues that may arise due to inflation. It also draws attention to the tendency for foreign investment to result in less government intervention which may affect the industry in the longer term.
It is recommended that:
The government increase the breadth of its proposal to all investors in the manufacturing industry so as to reduce competitive pressures on local manufacturers.
The government increases investment in training to provide a skilled workforce and reduce inflationary wage pressures.
Introduction
This Report shall be to determine whether or not tax incentives, with relation to foreign direct investment (FDI), are beneficial, holistically. First we must say a word about the nature of FDI.
FDI can be defined as
“...investment made to acquire a lasting interest in an enterprise operating in an economic environment other than that of the investor, the investors purpose being to have an effective voice in the management of the enterprise.”(United Nations, 1992)
Policies to promote FDI take a variety of forms. The most common are partial or complete exemptions from corporate taxes and import duties. These policies are typically the result of formal legislation which apply to all foreign corporations that meet
Reporting to the Manufacturers league
Executive Summary
This report has been written in response to the government’s proposed tax incentive policy for foreign multi-national corporations to increase foreign direct investment within Australia.
The report draws attention to the reasons behind the government’s proposal. These include the slow growth trends of the manufacturing industry, restoring the dropped level of foreign investment caused by the global financial crisis as well as a desire to increase levels of employment within the manufacturing sector.
It continues by drawing attention to the resultant competitive issues that may be caused by such a move as well as issues that may arise due to inflation. It also draws attention to the tendency for foreign investment to result in less government intervention which may affect the industry in the longer term.
It is recommended that:
The government increase the breadth of its proposal to all investors in the manufacturing industry so as to reduce competitive pressures on local manufacturers.
The government increases investment in training to provide a skilled workforce and reduce inflationary wage pressures.
Introduction
This Report shall be to determine whether or not tax incentives, with relation to foreign direct investment (FDI), are beneficial, holistically. First we must say a word about the nature of FDI.
FDI can be defined as
“...investment made to acquire a lasting interest in an enterprise operating in an economic environment other than that of the investor, the investors purpose being to have an effective voice in the management of the enterprise.”(United Nations, 1992)
Policies to promote FDI take a variety of forms. The most common are partial or complete exemptions from corporate taxes and import duties. These policies are typically the result of formal legislation which apply to all foreign corporations that meet
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