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Goldsworthy report calls for the Government to increase tax concessions to research and development businesses and to exempt high technology industries from capital gains tax in order to make Australia a more attractive destination for investment

PETER CAVE: The author of the Goldsworthy report is the Dean of Business at Bond University, Professor Ashley Goldsworthy. He's told A.M.'s Catherine Job he was not asking the Government to pick winners by backing the computer industry but to invest in an area that will provide billions of dollars in return.

ASHLEY GOLDSWORTHY: We're not suggesting picking winners; we don't believe it's a moral argument at all. We're looking at it as a business argument, and that is that if there is a benefit to be obtained by attracting investment to Australia in these industries, then we should go after that benefit.

CATHERINE JOB: But you're talking about getting into a bidding war that's already seen cities like Dresden in Europe offer a package to a company that amounted to half a million dollars per job generated.

ASHLEY GOLDSWORTHY: Per job, that's right.

CATHERINE JOB: It still didn't get the contract.

ASHLEY GOLDSWORTHY: No, it didn't, it didn't; but Ireland did. And the examples we've given in the report of where countries are prepared to invest to get a return surely is what the argument is all about. If you can make a business case that justifies the investment, why not do it? And we are not in the playing field bidding against the Malaysias, the Israels and the Irelands of this world, and we should be.

CATHERINE JOB: We are on the playing field arguing for a level playing field, arguing at APEC for everyone to behave in the same way and not engage in this sort of practice, aren't we?

ASHLEY GOLDSWORTHY: No, we're not going against that sort of argument. We're saying, certainly, that the aspects such as the taxation regime need to be looked at so that we're internationally competitive. Now, there's nothing wrong with saying that you need a more attractive taxation regime to make Australia a more attractive destination for investment.

CATHERINE JOB: Amongst those tax reforms you're asking for a backflip in the Government's decision to scrap tax concessions in the research and development area. Is that politically feasible?

ASHLEY GOLDSWORTHY: No, we're not asking for a backflip. What we've suggested is a number of actions which we believe will help reinforce, for example, RD. We're suggesting a new approach to support for RD. We're suggesting a new approach in a number of other ways, which we believe the Government will look at objectively, and hopefully decide that some of them are worthwhile supporting.

CATHERINE JOB: What are the consequences if the Government doesn't accept your recommendations?

ASHLEY GOLDSWORTHY: Well, I'm not operating on the basis of the Government not accepting the recommendations. I think we've made the point very clear in our report that these industries are too important to ignore, that they're too big for us to let pass by, and we've got to take actions that will get us into the game.

CATHERINE JOB: We're not in the game at the moment?

ASHLEY GOLDSWORTHY: Well, there's a little bit too much of watching the game from the grandstand. We would like to get more into the scrum.

CATHERINE JOB: How much money will your package cost?

ASHLEY GOLDSWORTHY: It's not a matter of cost, it's not a matter of cost.

CATHERINE JOB: But the money has to come out of the budget first, doesn't it?

ASHLEY GOLDSWORTHY: It's a matter of relating the incentives needed to attract whatever the activity is that is going to give you the return. Now, as I've said before and I say again, 10 per cent of something is better than 100 per cent of nothing. You cannot put that in the context of being in some way a cost. It's an investment that's going to produce a return. The reason that Ireland won the third Intel plant is because the first two had already repaid the investment they'd made and they were prepared to do it again.

PETER CAVE: The Dean of Business at Bond University, and former Federal President of the Liberal Party, Professor Ashley Goldsworthy.