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Tuesday, 10 February 2015
Page: 261

Senator CORMANN (Western AustraliaMinister for Finance) (13:48): The best way to boost the capacity of Australian businesses to invest more in research and development is to grow a stronger economy. Over the last 17 to 18 months, the government has worked very hard to strengthen the economy and create more jobs, and of course the results are starting to show. Last year the economy grew by 2.7 per cent, up from 1.9 per cent the year before. We have scrapped the carbon tax. We have scrapped the mining tax. We have finalised three free trade agreements with key economies in the region: China, South Korea and Japan. We are rolling out a record infrastructure investment program. We are pursuing a whole range of measures to boost economic growth and to help Australian businesses be more successful and generate more profits to give them more capacity to employ more Australians and invest more in research and development to facilitate stronger growth into the future.

What we are saying here is that we agree with the former Labor government that it is appropriate in the current circumstances to better target the tax incentives available for research and development. Instead of providing a 133 per cent tax deduction for Australia's most profitable businesses, we are proposing for that to be a 100 per cent tax deduction only. The way we have structured it, in consultation with the crossbench, is to put a $100 million cap on the special benefit available from taxpayers for those businesses making research and development investments. We think that is appropriate, we think that is well balanced and we think that the issue is well understood, and I would urge the Senate to support it.