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Wednesday, 24 August 2011
Page: 9161


Mrs MIRABELLA (Indi) (10:44): This legislation is yet another example of the extraordinary disconnect that this government has with industry. The Assistant Treasurer spoke about delays. That is right. The bill was passed in last November. Why was it not presented to the Senate for debate and discussion until after 1 July this year? That is because the industry minister lacked the advocacy skills to convince the crossbenches, as they existed before 1 July, and the courage to argue his case. From the very first time these changes were mooted the government asked industry for input. There were discussion papers, there were drafts, and industry took time from its business activities to assist the government. In return for that goodwill, what did the government do? It utterly ignored the advice and the suggestions of industry. We know that the ideas for changes to the R&D regime did not come from the minister; they came from Treasury. We know; we were in government and they had similar proposals. They were in the bottom drawer and they wanted to pull them out because they claim that these changes would be revenue neutral, but in fact this is a revenue-raising measure.

There is a fundamental problem with the changes that the government wants to pursue. Those fundamental changes will mean that, by restricting access to the regime, by changing the definitions, for example, as they relate to dominant purpose and feedstock, the very industries that this week this government says it wants to assist, says that it still wants manufacturing to survive, are going to be hardest hit. So the changes the government is making to the R&D tax regime will make it far more difficult for the manufacturing businesses, the manufacturing industry and the mining industry to actually access the new tax regime.

We have heard great praise from the other side about the crossbenchers—that is, the Greens. The Greens voted for this to pass in the Senate, but do they actually understand what these changes are all about? Obviously, from their comments, they do not. We have had Senator Milne talk about those big, bad, large companies who dominant the scheme. Senator, it is not a competitive scheme; it is an entitlement scheme. Under the old regime, if you satisfied the requirements to be eligible, you got the concessions. Because a large company or a small company may have been eligible and successful did not preclude others from doing the same. A very important assumption on which the Greens have based their support for this bill is based on a lack of fundamental understanding of what the regime actually was, and at a time when the member for Melbourne, another member of the Greens, goes around touting the importance of R&D, one has to wonder what they are doing in supporting this legislation.

When I was made shadow minister for innovation, industry and science, the very first topic, the very first issue, I was bombarded with from dozens of industry players, large and small companies across the country, was changes to the R&D tax regime. We would not be standing here opposing it if it were an actual improvement and industry across Australia told us it would be to their benefit. But they have told us that it is to their detriment, and the government have never been able to provide the modelling to show that their changes to the R&D tax regime would improve investment in R&D, would be good for small business. They cannot prove it because Treasury, in demanding this, never conducted the modelling. It is not their concern whether there is actual investment in R&D in the manufacturing sector, in the mining sector. The government cannot prove that this legislation is a good thing because that is not what they have been told by industry. They do not have the evidence. They have not done the modelling and the hard work. At a time that the domestic manufacturing industry is suffering all sorts of other economic issues, why would the government make it even more difficult for them to take the important steps of investing in new technologies? (Time expired)