Going into the federal election held on 21 May 2022, it was not expected that the R&D Tax Incentive was to be impacted (in the short term at least), and there were not any announcements during the campaign that have been R&D tax specific.
This was so, since recent legislative amendments to the R&D Tax Incentive had only recently commenced after the October 2020 bi-partisan enactment of the underlying law, and it would be unlikely for further change to happen so soon.
The election was won by Labor, who have taken government after approximately a decade of a Coalition government.
The Coalition government was in power during what we consider to be the most challenging period in R&D tax history (the compliance crackdown phase between 2017 to 2019, during which a number of adverse legislative changes were also proposed to the programme). The Coalition government also had a number of industry ministers, whose responsibilities included oversight of the R&D Tax Incentive.
However, the Coalition government do deserve credit for backing away from controversial amendments proposed to the R&D Tax Incentive. The eventual amendments that passed and commenced for FY22 are far superior, with a stated objective of using the R&D Tax Incentive to assist the country’s economic recovery from COVID.
The R&D Tax Incentive succeeded the previous R&D Tax Concession in FY12 and was originally a Labor Government initiative. We are hopeful (and cautiously optimistic), that the incoming government will look to preserve the programme’s stability and not propose adverse changes to the programme in the near term.
Some highlights of election media coverage during the week relevant to the R&D Tax Incentive include the following:
For more information about the R&D Tax Incentive, visit our website.