In the May 2024 federal budget, The Albanese Government announced a strategic examination and review of Australia’s R&D system to align it with national priorities and improve outcomes.

This week, Ed Husic has announced specific details to launch the review, the first such comprehensive review in nearly 20 years.

The review will assess how to maximise the value of R&D investments, strengthen industry linkages, and support national priorities. The review will examine existing systems, such as the Research and Development Tax Incentive (RDTI), and explore broader strategies to ensure Australia remains competitive in global innovation.

Led by Robyn Denholm, Chair of Tesla and an experienced leader in R&D at some of the world’s most innovative companies, the review panel also includes:

• Emeritus Professor Ian Chubb AC, former Chief Scientist and Vice-Chancellor of the Australian National University.
• Professor Fiona Wood AO, pioneer of spray-on skin technology and former Australian of the Year.
• Dr Kate Cornick, CEO of LaunchVic and advocate for Australia’s startup ecosystem.

The terms of reference announced by The Government note:

The panel will consider opportunities to:

• maximise the value of existing investment in R&D, across government, universities, philanthropy and industry
• strengthen linkages between research and industry, enabling greater mobility of researchers and innovators between sectors and addressing barriers to meaningful collaboration
• support the achievement of national priorities, including mechanisms to improve coordination and impact of R&D funding and programs across Government and through our science agencies
• drive greater R&D investment by industry, and boost industry adoption of innovation
• uplift Australia’s overall R&D intensity.

In doing so, the panel will examine: 

• the current state of Australia’s R&D system, and comparable state of OECD investment in R&D, including levels of investment in R&D, R&D infrastructure and R&D workforce, across sectors
• barriers and risks impacting on Australia’s capacity to maintain R&D competitiveness 
• ways to better measure the value and impact of R&D investments, and maximise efficiencies
• ways to ensure R&D benefits are equitably distributed across regions and communities.

Federal Minister for Industry and Science Ed Husic said “This review is designed to give us an evidence-based pathway to stronger growth,”

The review comes at a critical time, as Australia’s current R&D investment stands at 1.68% of GDP, significantly below the OECD average of 2.73%.

The Government’s press release notes that the strategic examination will be conducted until 31 December 2025.

Swanson Reed is pleased that the review has representation from an eminent business person such as Robyn Denholm, however we hope that the review will also sufficiently take into account consideration from the Small Business  community. Swanson Reed intends to participate in the consultation process.

In recent years, there have been calls from some to make significant changes to the R&D Tax Incentive (including changing from a broad, market based, self assessment programme to a grant based system which is assessed based on government identified areas of strategic priority). We believe any such change would be a mistake and undermine business confidence and empowerment to make timely and significant investment decisions.

Swanson Reed believes that a strong, stable and certain R&D Tax Incentive is a key to maintaining business confidence to undertake long term investments in R&D and will continue to call for stability in the programme.

Please get in touch with our office if you require assistance, would like to speak to someone about a potential claim, or check out our website for more information.