Cochlear boss Dig Howitt likes the sound of new CSL plant

Cochlear’s CEO Dig Howitt says the federal government’s $1.8bn deal with CSL will build Australia’s competitive advantage in medical manufacturing.

Cochlear’s chief executive and president says the federal government’s $1.8bn deal with pharmaceutical giant CSL will build Australia’s competitive advantage in medical manufacturing.

This week the Morrison government confirmed the largest biotech and vaccine manufacturing plant in the southern hemisphere would be built in Melbourne to provide rapid response to future pandemics. The agreement is expected to create 1300 biotech jobs.

Dig Howitt told The Australian’s Strategic Forum on Thursday the agreement, which is a major part of the government’s post-pandemic manufacturing strategy, was a “terrific outcome”.

“Not only what it will do for CSL, but the spin-off benefits of having a factory of that scale and capability. It will create jobs and real expertise in medical products which is critical for Australia’s future,” he said.

“We have to make sure we have an economy which is internationally competitive.”

Mr Howitt said Australia was a global leader in its research and institutions, but lagged behind other countries in outputting the technology.

“Australia is very good at creating ideas. We have been less good at commercialising the research and even less good at really extracting the value,” he said.

He added the federal government’s research and development tax incentive unveiled in the October budget was an important step, but more needed to be done to reduce taxes.

“Our tax rate is uncompetitive. Companies absolutely look at tax rates when they look at where to invest. We‘re seeing around the world more and more companies bring in a lower tax rate for intellectual property.”

Speaking on the same panel, Salesforce Australia chief executive Pip Marlow said expats returning to Australia were a boost for the country as it recovered from the pandemic.

“One in four Australians are born overseas, it‘s been a big part of our population growth. Right now skills sovereignty is going to become far more important,” she said.

“What I’m seeing is a lot of Aussies boomeranging back so we are getting a brain gain versus a brain drain that we’ve seen over the past few decades.

“So let’s bring them back so they can bring in some new ideas, different ways of looking at the world and solving business problems. I think it’s an opportunity for us.”

Committee for Economic Development of Australia chair Diane Smith-Gander said the constraints of immigration due to border closures and quarantine caps would remain a challenge in the future.

“It’s very important for us to get tertiary students and secondary students back in. We’re going to have to think about repatriating Australians and eventually tourists,” she said.

“So much of our economy is built around these trade flows.”

Ms Smith-Gander said government initiatives that granted businesses visas for inter-company transfers could tackle the country’s skills gaps.

“We’ve had for a long time an economy that has relied on population growth,” she said.

“We’re not going to have that so we’re going to need to get our workers in growing sectors like healthcare from our current population. That means we will also need to work hard to increase female workforce participation.”