Bruce Teele, the chairman of the Australian Foundation Investment Company, has commented on the downturn in Australian manufacturing.
Teele, addressing AFIC’s AGM yesterday, spoke of his disappointment at foreign investment in Australian infrastructure assets and the outsourcing of manufacturing by Australian companies.
"What we are seeing in Australia is essentially the hollowing-out and exporting of much of our manufacturing industry, and that means that we don't have the same range of companies in Australia producing franking credits as was true in the past," The Australian reports Teele as saying.
Teele pointed out the lack of tax revenue going into Australian coffers and other negative outcomes from outsourcing. He described a "double bunger" effect, both taking investment targets and tax revenue out of the country.
"More and more companies are seeing themselves as moving offshore or setting up offshore subsidiaries, and this is not going to create earnings from which franking will apply, because it won't gather any tax in Australia."
AFIC is the largest listed investment company in Australia, with a market capitalisation of $4.27 billion at the end of the last financial year. Its stated focus is on “investing in Australian equities.”
Image: AFIC website