Government tax incentives on research and development
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Australia is at an economic crossroads. The perceived end of the mining boom, and the disappearance of the last bastions of the traditional manufacturing sector, have created uncertainty about Australia’s future and its place in the global economy.
Innovative solutions are needed to fill these gaps, and unfortunately the government’s policy, as it stands, is not sufficient.
In the race to innovate and develop technology, Australia has been gifted a fantastic head start – it has a highly educated population with the necessary expertise, and enormous natural resource reserves to utilise. Regrettably though, the Australian government is squandering these natural advantages by capping incentives for companies to undertake R&D.
Government policy will make or break Australia’s future as an innovative economy – and while other countries offer generous incentives for companies to come to their shores and undertake R&D, Australia risks being left behind. It is crucial that Australians communicate to their elected representatives that they value long-term economic foresight over short-sighted austerity – if you would like to add your voice to those calling for a reversal in policy regarding government support for innovation, please sign the petition and follow the instructions to send a message to your local member of parliament.
For more information, you can read my article: Innovation Rebate Caps Are Restricting Australia’s Prosperity.
We have provided a pre-written letter below that you can email onto your local Member.
You can lookup your local Member's details here.
I am concerned to hear about recent proposed alterations to the research and development tax incentive made by the Australian government, and I am writing to strongly encourage you to consider reversing these changes, specifically the capping of the tax rebate. I firmly believe that Australia should return to the program that best supported research and development (R&D) in Australia, which will help safeguard our future economic prosperity.
Australia is already behind the OECD average of 2.38% of GDP spent on R&D, spending only 1.88% of GDP on such programs. Supporting innovation through investment will be the lifeblood of our economy in future, a future we need to secure today. As Universities Australia Chief Executive Catriona Jackson observes “Research expands Australia's economy. Research saves lives. Research creates new products and industries that generate jobs"
If the government does not wish to adequately fund R&D themselves, it must support business to do so instead. At present however, there is insufficient support being offered, and a worrying trend is emerging; private expenditure on R&D in Australia has actually fallen in the last decade - from 1.4% of GDP in 2008, to 1% of GDP presently.
Meanwhile, rather than arrest this decline, the government is vaunting their decision to remove one of the few incentives for businesses to undertake R&D. These tax credits were helping to promote innovation in a range of fields, and I urge you to reverse this policy to help promote innovation rather than hinder it.
I write to you out of concern for Australia’s economic future. I am asking you to make uncapping the R&D tax rebate part of your platform for the upcoming election, with the knowledge that this is an issue that matters to many Australians. I ask that you raise this serious question at forthcoming party meetings, and actively show your support for innovation in Australia. Please let me know that you are committed to securing Australia’s economic future by preventing the harm that capping the R&D tax rebate threatens to do to Australian businesses, and the country’s prosperity.
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