Competitive R&D incentive scheme needed to keep innovation in Australia has been saved
Competitive R&D incentive scheme needed to keep innovation in Australia
24 October 2016: Australia is at risk of losing ground to other nations if it does not maintain a competitive R&D incentive scheme, says Deloitte’s life sciences group leader and R&D tax partner, Hank Sciberras.
Speaking at the International BioFest 2016 conference in Melbourne this morning, Sciberras said, historically, Australia’s R&D incentives for small and medium enterprises in particular have been globally competitive.
“Australia fosters a remarkable innovative culture. However, following the release of the Federal Government’s long-awaited Review of the R&D Tax Incentive report at the end of September, we risk losing this attractiveness as a destination to grow IP if we do not have the right incentives in place to remain globally competitive.
“Two of the reviews recommendations, a cap on the refundable component of the R&D tax incentive, and a proposed intensity threshold that is required to be exceeded before accessing the incentive, are likely to reduce the scheme’s ability to promote Australia as a global destination for research and development.
“Australia is currently ranked 16th globally by the OECD’s business enterprise R&D expenditure (BERD) intensity indicator, behind regional neighbours Korea, Japan and China. But with many countries introducing and enhancing their own R&D incentive programs, Australia will slip behind. This will especially be the case following the government’s decision to proceed with the reduction in the R&D tax offset rates available to Australian businesses under the R&D tax incentive, the primary support mechanism for R&D activities undertaken by industry.
“Projects are mobile and companies have global options,” he warned.