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Oz to Spend A$1.4 Billion to Enhance Global Manufacturing Profile

The program includes dedicating A$254 million to help domestic firms win work in global supply chains and major projects.

Australian Prime Minister John Howard announces a A$1.4 billion ($1.16 billion) program to boost the Australian manufacturing industry and promote exports.

He says industries, including the struggling automotive sector, will benefit from the 10-year plan.

The program includes dedicating A$254 million ($210 million) toward a scheme to help Australian firms, including auto makers and suppliers, win work in global supply chains and major projects.

Some A$351 million ($289.7 million) will be spent over the next 10 years to support business in the services and manufacturing sectors.

New Australian industry productivity centers will help small-to-medium enterprises enhance their international competitiveness and tap into global supply chains, with the first center expected to be launched in September.

“This policy has been put together after a year of consulting large and small firms within the broad spectrum of manufacturing and other industry in this country,” Howard says.

“The whole theme of this policy is to further the process of global integration and to take advantage of the markets that are available for Australian manufacturing around the world.”

Howard says there’s a niche contribution of A$11 million ($9.11 million) over two years to pursue some export opportunities under the Australia/U.S. Free Trade Agreement.

The government also is extending the eligibility of the 175% premium research and development tax concession to ensure that multinationals undertake more R&D in Australia.

Industry Minister Ian Macfarlane says the beneficial ownership test for the 175% R&D tax break will be changed to allow claims for projects undertaken in Australia, regardless of where the intellectual property is held.

"This change is expected to result in an extra billion dollars of R&D investment in Australia over the next four to five years,” he says. “It's predicted more than 300 companies will use the concession annually under this new arrangement.

"The Australian arms of multinational enterprises account for a disproportionate share of manufacturing exports, jobs and R&D. The change will give those businesses a strong reason to expand their operations here. Their investment creates jobs, brings the latest technology to Australia and enhances the skills of our workforce.”

The government’s move is bound to benefit the country’s Big Four domestic auto makers, particularly GM Holden Ltd., which has played a key role in engineering General Motors Corp.’s global large car, rear-wheel-drive architecture.

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