Labor congratulates Greg Hunt on his appointment as the Minister for Industry, Innovation and Science.
One of Mr Hunt’s first priorities as Minister should be to immediately release the review of the R&D Tax Incentive and start working constructively with the sector to identify more suitable ways to target the scheme.
The Liberals’ budget measure to cut $860 million from the R&D Tax Incentive would reduce the rates of the refundable and non-refundable tax offsets by 1.5 per cent.
This is on top of the Abbott-Hockey era $1.1 billion cut to the scheme, which came into effect on 1 July 2014 and imposes a retrograde cap on eligible expenditure.
Malcolm Turnbull has vowed to press ahead with all his Budget measures, despite facing an even less predictable Senate than he did before the election.
Yet to do so is highly contradictory considering the Turnbull Government also commissioned a review of the R&D Tax Incentive to identify ways to improve the scheme’s effectiveness.
The findings of this review have been hidden from public view and should be released immediately. Businesses investing in R&D need to know where they stand.
As part of our Budget Repair strategy, Labor committed to using the findings of the R&D Tax Incentive review to consider more appropriate options to amend the scheme and achieve the same level of savings.
Labor’s amendments would be guided by the following objectives:
No disadvantage for the most innovation-intensive businesses – such as those with high R&D-to-sales ratios, high value-added and advanced manufacturing activities.
Improving collaboration between industry and research, to address a consistent weakness in Australia’s innovation performance.
Maintaining a high level of benefit to innovative small or medium-sized businesses, which lack the cross-border tax minimisation opportunities of larger multinationals.
Malcolm Turnbull likes to talk about innovation, but what he means by innovation has never been completely clear – even after he announced a National Science and Innovation Agenda (NISA) with the previous Minister, Christopher Pyne, which came with a whopping $28 million in taxpayer funded advertising.
NISA returned $1 billion from the $3 billion the Abbott-Turnbull Government stripped from science, research and innovation and in policy terms it is innovation-lite.
Businesses need certainty and stability to invest in R&D – not mixed messages and empty rhetoric, which is all they are getting from the Liberals.
Labor stands ready to work with Mr Hunt to find a better way to deliver savings without unduly disadvantaging businesses investing in R&D.