Australian biotech company CSL chose Switzerland over Australia for its new manufacturing plant because of this country’s higher company tax rate, according to the company’s director.
Speaking at the Australian Financial Review JPMorgan Chanticleer Lunch in Melbourne yesterday, Christine O'Reilly said that, while Australia was considered for the facility, it received a ‘wildcard’ entry behind the other more financially attractive shortlisted locations, Switzerland, Ireland and Singapore.
"In the end, of the four that got to the shortlist … Australia came a whole long way behind, in respect to the attractiveness to develop and build and continue to operate advanced manufacturing – as a consequence of tax rates, in essence," O’Reilly said.
While Switzerland has a high currency and high labour costs, the Swiss corporate tax rate is about 18 per cent, compared to the Australian rate of 30 per cent.
The products to be produced at the Swiss plant will be based on R&D carried out in Australia.
In June, in a submission to the Government’s “Re-think” tax discussion paper, CSL proposed a company tax rate capped at 10 per cent, for advanced manufacturing derived from Australian innovations.
The submission argued that an Advanced Manufacturing Tax would not reduce Treasury revenue, since Australia is not attracting significant investment of this type in any case. Rather, the addition to output and employment made possible by a genuinely more competitive tax rate would be expected to increase Government revenues.