FED:R&D tax offset to boost investment: Carr

AAP General News (Australia)
08-23-2011
FED:R&D tax offset to boost investment: Carr

PARLY 014

CANBERRA, Aug 23 AAP - Australian firms investing in research and development (R&D)
can now access more government assistance to boost the nation's productivity, Innovation
and Industry Minister Kim Carr says.

Senator Carr said the passage of the Tax Laws Amendment (Research and Development)
Bill 2010 and the Income Tax Rates Amendment (Research and Development) Bill 2010 in the
Senate on Tuesday would underpin investment in innovation.

"It is about building support, changing the culture of business in this country so
to ensure that there are higher limits of investments," he told the chamber on Tuesday.

Eligible firms with a turnover of less than $20 million could claim a 45 per cent refundable
tax offset while all other eligible businesses could claim a non-refundable 40 per cent
R&D tax offset.

Senator Carr said R&D investment had increased significantly in the past 15 years.

"This is a scheme that in the 1990s was attracting something less than $300 million
per annum in terms of support, to the position where we estimate in the next financial
year will require $1.8 billion per annum," he said.

Australian Greens senator Christine Milne said innovation was essential for the economy.

"Increasing productivity through innovation now has to be Australia's top priority,"

Senator Milne said.

"With these important structural reforms, much more support will be delivered to the
small and medium-sized enterprises which are genuinely the engine-room of innovation in
Australia."

But manufacturing lobbyist the Australian Industry Group (Ai Group) was sceptical the
new bill would boost R&D in the sector because it would take time for the changes to filter
through,

"We will be closely monitoring the take-up and effectiveness of the scheme and would
urge the government to be open to future amendments," Ai Group chief executive Heather
Ridout said.

"It will be important for the government to make a substantial effort to build understanding
in industry of these changes."

The bills were expected to have no impact on the budget's underlying cash balance in
the four years to 2014/15.

AAP el/klm

KEYWORD: RESEARCH

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