Hearing implants maker Cochlear has called for the ceiling to be raised on tax breaks for research and development by companies.
Chairman Rick Holliday-Smith says he is encouraged by the government's focus on innovation to help drive long-term growth for Australia and to support jobs, but it should do more to reward innovative companies.
"Specifically, we think the current $100 million cap on R&D spend qualifying for the current incentive should be raised for advanced manufacturing companies," he told shareholders at Cochlear's annual general meeting on Tuesday.
Earlier this year, the federal government capped the tax incentives in an effort to reduce its budget spending, making research and development more expensive for Australia's biggest businesses.
The move was heavily criticised by the industry, which believes it will hurt the country's international competitiveness and push businesses to move R&D activities overseas.
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"Cochlear is bumping into this artificial cap and there is an incentive to perform additional R&D abroad where we qualify for similar or even enhanced incentives," Mr Holliday-Smith said.
The firm, one of the largest implant makers globally, spent around $128 million on R&D expenditure in 2014/15. It expects to maintain that level of spend on research this year.
Mr Holliday-Smith on Tuesday also reaffirmed Cochlear's full year profit guidance of $165 million to $175 million, announced in August.
He told shareholders there was strong momentum in the business at the moment, and first half numbers were likely to be stronger than the latter part of the year.
"We have approximately 2,000 China tender units being sold in the first half, and we have recently observed a bias in upgrade sales into the first half," he said.
"We also tend to focus future growth targeted expenditures into the second half."
In August, despite a 56 per cent jump in 2014/15 annual profit to $146 million the global company trailed analyst expectations. Disappointed investors had responded by driving its shares lower.
The company is also undertaking a detailed review of its China strategy over the next year, as it looks at improving its share in the key market.
Cochlear has previously targeted China's ageing population to deliver its next major phase of growth.
Cochlear's shares closed up 37 cents, or 0.44 per cent, to $84.82.
