Home » News » The Australian Industry Group Submission to Strategic Examination of the R&D System

The Australian Industry Group Submission to Strategic Examination of the R&D System

The Australian Industry Group (Ai Group®) is a peak national employer organisation representing traditional, innovative and emerging industry sectors.

Ai Group is considered one of the leading business advocacy organisations in Australia.

Ai Group has recently published their submission to The Australian Government’s strategic examination of the research and development (R&D) system.

The Ai Group submission includes some notable points on the R&D Tax Incentive including:

• A note that tax incentives and grants are valuable, however they can require a high level of administrative resources;
• A proposal to reform the R&D Tax Incentive, by way of:
  • the option aligning payments for eligible companies with their Business Activity Statements (BAS) to provide a more consistent and reliable funding stream;
  • the refundable Tax Offset Cap, Non-Refundable Tax Offset Cap and Expenditure Threshold under the RDTI to be raised significantly and indexed to CPI;
  • a review of how RDTI funding and credits are distributed;
  • published AI analysis of R&D Tax Incentive data which could identify emerging technology clusters and research patterns across industries.

Swanson Reed respects Ai Group’s views and certainly agrees with the proposal to increase the caps and thresholds, and index to CPI.

Regarding the proposal to allow R&D Refunds within BAS statements, whilst this would be great in theory, we do not think this is workable as a proposal since too much can go wrong that may lead to inaccurate claiming of refunds before year end (including complex interactions between activity eligibility, R&D expenditure and tax loss balances that may not be able to be determined prior to 30 June). Swanson Reed had previously outlined our thoughts on R&D Refunds within BAS statements in a submission to The Government’s previous proposal to implement a change for R&D Quarterly Credits which did not proceed.

Swanson Reed also made our own detailed submission to The Australian Government’s strategic examination and it’s expected that The Panel may report findings later in the year.

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