Shadow Minister for Research, Innovation and Industry, Senator Kim Carr, said today that the Liberals’ flip-flopping on the company tax rate shows exactly why they should abandon their plans to cut the Research and Development Tax Incentive by 1.5 percentage points.
Scott Morrison has already admitted that Australian businesses have been left “in limbo” as the Government desperately tries to recover from its chaotic PPL backflip by walking away from a firm promise to lower the company tax rate.
In its short-sighted Budget, the Government explained that its decision to slash $620 Million from the R&D Tax Incentive was:
Consistent with the Government’s commitment to cut the company tax rate … the Government will preserve the relative value of the [tax incentive] by reducing the rates … by 1.5 percentage points.
Budget Paper No. 2, p. 18
Senator Carr said: “This argument never made sense and now it’s been completely blown out of the water.
“The previous Labor Government reformed the R&D tax credit system to give business a simpler and more predictable incentive and encourage investment in new R&D capability in Australia.
“After consulting with industry, Labor deliberately uncoupled the level of R&D support from the company tax rate.
“The Liberal Government wants to go back on this principle, but its flip-flopping on the company tax rate shows exactly why the R&D Tax Incentive should be left alone.
“The incentive will only work if it offers certainty for companies when they are making critical R&D investment decisions – decisions that have wider and long term benefits to the entire Australian economy.
“Given that the Abbott Government is now paralysed with division, I call on the Treasurer and Industry Minister as a matter of urgency to withdraw the two bills that would cut the R&D Tax Incentive, and get behind Australia’s innovative, research-intensive companies.
“If they fail to act on this straightforward matter, the Liberals will simply be confirming that only Labor is serious about creating the innovative, high skill, high wage jobs of the future.”
FRIDAY, 6 FEBUARY 2015