Home » News » BCA “Seizing the Moment” Report Flags Importance of R&D Tax Incentive and Addressing Productivity Issues

BCA “Seizing the Moment” Report Flags Importance of R&D Tax Incentive and Addressing Productivity Issues

August 24th, 2023

This week, the Business Council of Australia (BCA) released a report titled “Seizing the Moment“which proposes a plan to reverse the nation’s productivity slump and drive competitiveness.

The report warns that Australia can’t just keep relying on good luck to create economic success.

The BCA highlights that if Australia wants sustained wage growth and to maintain full employment, we need a reinvigorated economic growth agenda driven by large-scale investment, higher productivity, and greater innovation.

The R&D Tax Incentive is also mentioned several times throughout the report, and key highlights include:

  • Growth in R&D spending and intensity has slowed;
  • If Australia is serious about making things, growing new industries and becoming a productive, high-wage economy, we must ensure other settings including standards and regulatory approvals allow and encourage it. On average across 20 OECD countries, for example, more than 60 per cent of medicines become available to patients within six months. In Australia, it is just 22 per cent;
  • If we don’t fix these impediments it will cost Australians jobs and prosperity and impact lives and wellbeing. Australians almost unanimously agree that spending on research and development to maintain Australia’s economic competitiveness is important, with over half saying it is very important;

Among a range of recommendations, the BCA has proposed that within 5 years, the government should enhance the Research and Development Tax Incentive by introducing a premium of up to 20 per cent to incentivise collaborations between industry and publicly funded research organisations and universities.

This initiative was originally proposed by a Government review of the R&D Tax Incentive conducted by Bill Ferris, Alan Finkel and John Fraser and released in 2016.

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

 

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