Labor leader Anthony Albanese has called for a bolstering of the research & development tax incentive scheme, as an enquiry into potential changes re-opens after COVID-19 delays.
Speaking at the National Press Club yesterday, Albanese took aim at the government’s plans to wind back the research and development tax incentive, suggesting that scaling back the scheme could hamper economic growth.
The controversial proposed reforms would introduce a refund cap of $4 million, and create a tiered system, calculating an ‘incremental intensity’ measure based on R&D expenditure as a percentage of total business expenses.
“We must strengthen our capacity to create. We must become serious about high-tech manufacturing,” he said.
“But our R&D investment has fallen below 2% of GDP – below countries like South Korea, Israel, Sweden, Denmark, and Singapore,” he added.
“The Morrison government plans to cut the research and development tax incentive which is designed to encourage innovation and growth.
“Unless we invest in R&D we will only be able to read the story of our proud manufacturing history, when we should be writing the next chapter.”
Albanese suggested that the COVID-19 pandemic has renewed a focus on science and technology, which has “been taking a pounding in that perversity we call the culture wars”.
“COVID-19 has reunited us with our respect for science. And with that has come an understanding that science is what can take us from lockdown to unlocking our potential.
“And as we get better at converting that hunger for knowledge into dollars, science will be the core of our future economic growth, our new industries and the jobs they will create,” he said.
As an aside, Albanese also took a pop at politicians who deny climate change.
“There is no shortage of politicians who tell us they don’t believe in the science of climate change,” he said.
“But science is not an act of faith. Climate change is no more a matter of belief than the coronavirus is. It’s about heeding the evidence – and it is overwhelming.”
The speech comes as the Senate Economics Legislation Committee into the R&D tax incentive is reportedly set to re-open.
InnovationAus reports this morning that the committee could be meeting as soon as next week.
The report from the enquiry was initially set to be released in April, but it was delayed because of the COVID-19 pandemic.
The enquiry follows a 2016 review into the scheme, and the announcement of the proposed changes in 2018.
Since then, a crackdown on R&D claims for software meant some startup’s claims were audited and rejected, leaving them with millions of dollars to repay.
In March this year, Aussie entrepreneur and investor Adir Shiffman launched a petition calling on the government to peddle back the changes to the scheme, saying they could compound damage already done to startups.
He demanded a six-month suspension of the senate enquiry, leaving time for the economic effects to be fully realised before making any decisions, and called for a pause on clawbacks of payments made in error.
He was also calling for allowing early claims for next year’s cash, and bonus capital injections for some startups.