Hello to everyone gathered in Melbourne today for the Flexible Packaging and Label Manufacturers Association conference.
Now while I couldn’t be there in person, I didn’t want to miss the opportunity to say a few words, so I’ve packaged together my thoughts — if you’ll excuse the pun — and sent them to you in video form.
So let me start by acknowledging the work of this industry.
Whether it’s packaging, padding or labelling — to name just a few — it is an industry that reaches into the lives of every Australian, day-in and day-out.
It’s also one where new ideas can, and do, take hold.
It could be finding cheaper or more sustainable materials; discovering different ways of cutting down on waste; or tweaking designs to keep up with today’s market.
Whatever the idea, the search for and embrace of new ways of producing and delivering has seen this industry evolve and grow.
Innovation and the economy
And that’s what I want to talk about now: innovation and the role it can play in growing Australia’s economy and jobs.
Our economy is at a crucial stage of its transition from a mining investment boom to growth that is led by other sectors – and there is no reason why that shouldn’t include advanced manufacturing.
What that means is that innovation — or the turning of ideas into reality — is absolutely critical.
We need to find new sources of growth.
We need to create new jobs, and to make sure that the ones we have continue to do well.
And to do that, we can’t simply rely on start-ups or IT firms.
What we need are existing firms, of all stripes and colours, doing what many of you do every day: developing new products, refining existing ones and improving how business works.
National Innovation and Science Agenda
The Turnbull Government firmly believes this.
We know that innovation is a driving force for Australia’s productivity.
Innovative firms are more competitive, have better market share and are more likely to boost employment.
That’s why we want to help businesses to join in the ideas boom, and we’re backing those words with deeds.
Take, for instance, our National Innovation and Science Agenda.
This $1.1 billion package of measures supports innovation across all sectors — including manufacturing — by encouraging businesses to try something new.
From new tax incentives, to changes to insolvency laws, to improved employee share scheme rules, it’s wide-ranging in its reach.
What’s more, the agenda builds on the Government’s earlier policies, such as our Industry Growth Centres Initiative.
For instance, right now we’re establishing growth centres for advanced manufacturing, food and agribusiness — all areas with huge potential for growth.
And this, of course, will provide opportunities for packaging and label suppliers.
To give you just one example, Australia’s new free trade agreements with China, Korea and Japan will create new markets for food exporters.
These could spur innovation in packaging to extend the shelf-life of our renowned fresh produce.
Australian Trusted Trader
And while I’m on the topic of trade, I should mention Australian Trusted Trader, or ATT, because I know it is something a number of you are interested in.
This new initiative recognises businesses with trade-compliant practices and secure supply chains, and rewards them with trade facilitation benefits.
Those benefits include a dedicated account manager, differentiated treatment at the border, and mutual recognition arrangements with key trading partners.
New Zealand has already signed on, and we’re working towards the same arrangement with China, Hong Kong and Singapore, to name just a few.
Now, what the ATT will ultimately do is increase the value of Australian exports, and make it cheaper to import by reducing regulatory barriers.
Furthermore, we estimate the economic benefits of the initiative over the next decade will be substantial.
We estimate almost $3 billion for participating Australian industries; a $2.2 billion increase in household consumption; and around $1 billion in extra business investment.
So it’s easy to see why more than 300 Australian businesses have expressed interest in joining the ATT.
I’d encourage you to take a closer look at this initiative and the opportunities for growth that it provides.
Now before I finish, it would be remiss of me not to talk about what the Government is doing to help small and medium sized businesses.
For the second year in a row, we’ve reduced the tax rate for small business — this time from 28.5 to 27.5 per cent. We are expanding this tax cut to medium sized businesses with turnover of up to $100 million in 2019-20.
We also expanded the threshold definition of small business to companies with turnovers of up to $10 million.
That’s around 870,000 companies which will have their tax cut to 27.5 per cent this year.
Furthermore, for those small businesses with turnovers of up to $10 million, we have given them access to a range of small business tax concessions.
This means that over 90,000 more businesses can now access immediate deductibility for each asset costing less than $20,000.
They can also enjoy simplified trading stock rules and a simplified method for paying PAYG instalments, which means less risk of penalties.
Our changes give businesses a leg-up so that they can innovate, try something new, and grow Australia’s economy in the process.
That willingness to be innovative is, as I’ve said, something most of you are very familiar with.
In fact, you only need to look as far back as the merger that created the Flexible Packaging and Label Manufacturers Association to see an example of this.
It was a pragmatic decision — made in light of changing industry circumstances — which will allow the association to better represent its members.
So I want to finish by encouraging all of you to continue on this journey.
Governments can only create environments in which innovation can thrive.
But it is individual businesses that will ultimately determine whether it can take advantage of these new economic opportunities, and the growth they offer.
So on that note, let me wish you the very best for the remainder of the conference, and thank you once again for this great opportunity.