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STA Lobbying for Australia to Have Greater “Sovereign Capability” in Manufacturing, Underpinned by Strong R&D

In the wake of the COVID-19 situation, there has been numerous parties lobbying that:

• Not only should the R&D Tax reforms proposed to apply for FY20 be abandoned; but
• The government should also implement measures to enhance incentives for business investment in R&D.

InnovationAus has reported that Science & Technology Australia (STA) has proposed:

• If the government’s proposed reduction to the R&D Tax Incentive were implemented, that any savings be directed to a research translation fund to help Australia build greater sovereign capability;
• A premium rate for collaboration be introduced to R&D tax incentive. Such a measure was originally proposed in the Ferris/Finkel review to provide a higher rate of tax benefit where companies incurred R&D Expenditure from academic institutions.

The points raised by STA are in addition to the petition being circulated by entrepreneur Adir Shiffman calling for stability and preservation of the R&D Tax Incentive, along with measures to enhance it such as:

• Early or interim payments of R&D Tax Offset entitlement; and
• Bonus payments in the current period.

Swanson Reed appreciates the efforts of these parties in lobbying and recognising the importance of the R&D Tax Incentive.

We acknowledge that given the budgetary cost of the Government’s other stimulus measures such as Job Keeper, the government may not have the means to provide any further enhancements to the current R&D Tax Incentives (such as early or bonus payouts), however we call on the government to withdraw and rule out the R&D Tax reforms proposed to apply for FY20.

Businesses conducting R&D Activities are already facing unprecedented uncertainty with the Covid-19 situation, and the flaws in the R&D Tax reforms proposed to apply for FY20 would only compound this uncertainty.

We call on both sides of politics to commit to a stable and substantial R&D Tax Incentive, that will facilitate an environment to provide business with confidence to invest in long term R&D Projects.