Home » News » R&D Tax Incentive Reform Still On Government Agenda, Despite Focus On Enhancing Local Manufacturing

R&D Tax Incentive Reform Still On Government Agenda, Despite Focus On Enhancing Local Manufacturing

May 22nd, 2020 R&D tax

Industry Minister Karen Andrews addressed the National Press Club during the week to outline Government plans for industry policy in the wake of the COVID-19 situation.

Points from the speech include the following:

  • Ms Andrews said the Coronavirus pandemic had exposed gaps in Australia’s manufacturing capacity, and there would be “significant changes” once the crisis abated;
  • The government would look to build on its “comparative strengths” in mining and agriculture and find ways to “value-add” on raw materials previously marked for export;
  • Battery manufacturing and food processing may be areas of focus;
  • The government would also look at reducing red tape, using its purchasing power to buy local, and reducing the cost of energy for manufacturers;
  • Ms Andrews dismissed questions about ditching proposed reform to the R&D Tax incentive scheme, and signaled that the Morrison government will not back down on planned cuts.

Media coverage of Ms Andrew’s speech during the week included quotes from Labor senator Kim Carr and Industry bodies who were highly critical of the government’s proposed R&D Tax Reforms.

The government had reintroduced a bill to reform the R&D Tax incentive in December 2019, despite:

  • A Senate Economics inquiry concluding that a previous iteration of the bill should be withdrawn due to concerns over complexity, particularly the controversial intensity threshold;
  • Widespread condemnation from industry, with a consensus that the intensity threshold would punish local manufacturers and risk driving R&D offshore.

The reintroduced R&D Tax Incentive bill was proposed to apply for FY20, however as it has not yet passed as law, it would appear very unlikely to be passed on time to apply for FY20 R&D claims.

Swanson Reed acknowledge that the government have provided generous support to business throughout the COVID-19 situation, however their reluctance to withdraw proposed budget cuts to the R&D Tax Incentive is puzzling considering:

  • The proposed intensity threshold would punish companies with high cost bases, particularly Australian manufacturers, who the government has stated it intends to greater support;
  • The savings potentially yielded from the changes are negligible relative to the budgetary impact of new stimulus measures introduced in recent months;
  • The proposed changes, and their subsequent application and interpretation, would impose upon companies significant uncertainty at a time when:
    • Australian businesses’ R&D investment was already in decline pre-COVID-19;
    • Australian businesses face significant headwinds post-COVID-19;

We call on the government to reconsider their position and withdraw their proposed R&D Tax Incentive reforms.

Post a Comment

(*) indicates required field.

Are You Eligible?


Click here for the R&D Eligibility Wizard

R&D Audit Checklist


Click here for the R&D Eligibility Wizard

Categories

Archives

 
 
 
  
 
 
 
 Posted on Google Google 
 
 Daniel McGregor  profile picture 
 
 
 Daniel McGregor  
 
11. August, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
I have been using Swanson Reed for my clients for more than a decade.  Having a specialist firm that can provide practical and commercial advice that produces real outcomes is very important and we have received great feedback from our clients.
Highly recommended.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 John  profile picture 
 
 
 John  
 
15. June, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
Damian and the rest of the team at Swanson Reed have been supporting us for several years.  We always appreciate their insights, expertise, and efforts.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Rueben Rajasingam  profile picture 
 
 
 Rueben Rajasingam  
 
6. June, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
Experienced responsive Team. They have been a great help to me and my company navigate the R&D tax claim process and have provided invaluable advice.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Enrique Esquivel  profile picture 
 
 
 Enrique Esquivel  
 
6. June, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
Damian and the team at Swanson Reed have been extremely helpfully and professional during all of our consultations. Highly recommended.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Jess at Y&C  profile picture 
 
 
 Jess at Y&C  
 
3. June, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Anatole Kononewsky  profile picture 
 
 
 Anatole Kononewsky  
 
2. June, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
The Swanson Reed team have provided our company with exceptional professional advice and assistance for all of our R&D claims for many years - have always achieved great results with excellent value for their services.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Payam Toloo  profile picture 
 
 
 Payam Toloo  
 
2. June, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
Damian Smyth and his team are very helpful, supportive and experts in their field of R&D Tax claims. I'm always happy with the work they do and been a customer of their for over 5 years.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Melissa Doddy  profile picture 
 
 
 Melissa Doddy  
 
31. May, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
The Team at Swanson Reed are very experienced R&D Tax Advisors and gave us ongoing support with all of our R&D Claims, the consultants ensured we were always working with current legislative guidelines, gave us assistance with compiling technical and government documentation and went out their way to ensure they were with us for the entire process from beginning to end.  Highly recommended to anyone who needs assistance with working through what can at times be a daunting process.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Gary Watson  profile picture 
 
 
 Gary Watson  
 
31. May, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
We can highly recommend Swanson and Reed as an R & D accountant. We have worked with them for several years now as they make our R & D claim so easy and communicate quickly with both us and our accountant.
  
 
 
  
 
 
 
 Posted on Google Google 
 
 Rob van den Bergh  profile picture 
 
 
 Rob van den Bergh  
 
31. May, 2022
 
 
 Google star 1Google star 2Google star 3Google star 4Google star 5Trustindex verifies that the original source of the review is Google. 
 
Always professional.