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R&D tax incentive drives investment

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THE HON GREG COMBET AM MP Minister for Climate Change and Energy Efficiency Minister for Industry and Innovation


GC 2/13 11 January 2013


Australian small and medium sized businesses have received around $500 million in direct payments during the first six months of the Gillard Labor Government’s new R&D Tax Incentive.

Under the new program, smaller businesses (with a turnover of less than $20 million per annum) engaged in eligible R&D can receive a 45 per cent refundable tax offset. For those companies in tax loss, this means they will receive a full refund of their offset amount.

The Minister for Industry and Innovation, Greg Combet, confirmed over 1500 smaller businesses across a range of industries had received a significant boost to their cash flow to support investment in eligible R&D activities.

“We have seen smaller businesses receive refundable offsets of up to $22 million. This is having a positive impact on these businesses,” Mr Combet said.

“The R&D Tax Incentive is designed to boost the amount of R&D being undertaken, particularly by small and medium sized firms. By making cash refunds available for firms that have undertaken eligible R&D and are in tax loss, we are helping offset some of the costs of innovating.

“Under the old policy, only businesses with a turnover of less than $5 million could receive refunds and only for expenditure of up to $2 million. The new scheme is more generous and small businesses are taking advantage of this.”

Almost $2 billion worth of innovative R&D has been registered by businesses since the new R&D Tax Incentive commenced. Already this financial year, over 2,100 businesses have registered activity under the program.

“Investing in R&D boosts business competitiveness and productivity, and can help create high-skill, high-wage jobs,” Mr Combet said.

“The response to the program has been very positive and registrations have been received from businesses across a broad range of sectors. For example, over 750 manufacturers have already registered $477 million worth of expenditure.”

AusIndustry is continuing to hold workshops to help SME’s, first time registrants and smaller consultants/ tax agents better understand and register for the R&D Tax Incentive. Details of workshops and other guidance materials are available at or through the Hotline - 13 28 46.

Businesses who undertook eligible R&D in the 2011-12 financial year have until 30 April 2013 to register their activities with AusIndustry.

Media contact: Gia Hayne 02 6277 7920