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Industry Ministers Comments on R&D Tax Incentive within Recent Government Release in February 2024

On 15 Feb 2024, Ed Husic’s department made a press release titled ‘Government investing billions in research and development’ to accompany the release of the 2023–24 science, research and innovation (SRI) budget tables.

The government notes in the release that:

• Investing in Research and Development (R&D) is fundamental to delivering the Government’s priorities to: rebuild Australia’s manufacturing capability, support home grown innovation, and secure Australia’s long-term productivity, resilience and prosperity;
•  SRI Budget Tables show the Government will invest an estimated $12.6 billion in R&D in 2023–24, an increase of 2.7 per cent compared with 2022–23. This provides $9.2 billion to support Research and Development, including to organisations such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO), and $3.4 billion for businesses undertaking research activities through the R&D Tax Incentive;
• These investments seek to provide the right frameworks so that business will be confident to invest in new research and innovations, supporting them to translate new knowledge into practical opportunities that drive economic growth and competitiveness.

Swanson Reed commends the government in being cognisant of needing to maintain a suitable environment to allow business to be confident to invest in R&D Activity.

 In recent months, there have been calls from some sectors 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 investment decisions.

As noted in our previous updates, we believe 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. 

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