InnovationAus has reported this week that the Senate Economics Legislation Committee review into proposed R&D tax incentive reform is reportedly set to re-open, and a meeting could occur in early July.
In December 2019, the government re-introduced a bill to reform the R&D Tax Incentive.
This bill was a slightly modified version of a previous reform bill (Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018), which did not pass through the Senate at that time. A Senate Economics Legislation Committee recommended in February 2019 that the initial bill should be deferred from consideration until further analysis of the bill’s impact is undertaken, particularly with respect to concerns around the proposed intensity threshold and refundable offset cap.
Smartcompany.com.au has also reported Labor leader Anthony Albanese’s comments at the National Press Club this week, largely critical of the proposed reforms. Notable statements from Mr Albanese include:
The points raised by Mr Albanese are valid, however in the interests of balance, it should be noted that whilst in power, the Gillard government also enacted cuts to the R&D Tax Incentive.
Swanson Reed recognises that the government has offered generous industry support during the COVID-19 situation via the Job Keeper, but this must be complemented with a withdrawal of the proposed R&D Tax budget cuts reintroduced during December 2019.
Swanson Reed calls on both sides of government to commit to a stable R&D Tax Incentive, and is of the view that the programme would be most effective in achieving its policy objectives if not subject to further proposed changes.