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Independents join Government to attack Australian R&D

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Senator Andrew Murray Australian Democrats' Industry Spokesperson

13 December, 1996 MEDIA RELEASE 96/89

Independents join Government to attack Australian R&D - But Democrats win $160 million concession -

The Australian Democrats say the Howard-Costello Government's move to reduce the tax concession available to encourage Australian research and development will "reduce job growth and is just plain bad economics".

Independent Senators Mai Colston and Brian Harradine have voted with the Government to reduce the tax concession from 150% to 125%.

"The Coalition Government's move to cut the rate from 150 to 125% is a clear and outrageous breach of an explicit election commitment," Democrats' Industry spokesperson Senator Andrew Murray said today.

"It is also an economic nonsense which will destroy Australian jobs, because it will make private sector R&D much less attractive here and much more likely to flow offshore. It is Budget cutting gone completely mad." .

In another move, the Federal Government has agreed to meet Australian Democrat concerns over the retrospective nature of its changes to R&D 'syndication* laws.

Senator Murray said earlier this week his Party's support for the clampdown on syndicates - worth up to $400 million a year - was conditional on the retrospectivity issue being fixed, and on an assurance that syndicates would be eligible to apply for grants under the new START research grants program.

"The Government has agreed to allow syndicates who were well advanced in the approval process - to the point of applying for registration - to have access to the concessional treatment," Senator Murray said. "That represents a win worth $160 million over four years to legitimate R&D syndicates which would otherwise have been dealt with very unfairly."

Assistant Treasurer Senator Rod Kemp also gave Senator Murray clear assurances in the Senate that syndicates who were not picked up by the amendment would be eligible to apply for grants under the START program.

Given those two conditions being met, the Democrats then joined with the Government to vote for the clampdown on 'syndication'.

In other amendments to Government’s Taxation legislation, the Senate voted to:

• Reject the Government's plan to restrict tax rebates provided to the chronically ill for . .../2

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Senator Andrew Murray Australian Democrats' Industry Spokesperson

13 December, 1996 MEDIA RELEASE 96/89

excessive medical expenses by raising the threshold for expenses from $1000 to $1500 ($73 million over four years out of the pockets of the chronically ill);

• Reject the Government plan to remove concessional tax treatment for co-operative companies (mostly rural co-operatives), a measure which would have cost the rural community $12 million over 4 years;

• Support a Democrat amendment to ease the retrospective application of tax on income earned by prospectors on mining leases (preventing retrospective taxes of about $20 million over 4 years); and

• Reject Democrat amendments to close down the infrastructure borrowing tax rort, an amendment would could have saved more than $500 million over 4 years and was consistent with the recommendations of EPAC, the National Commission of Audit and the Senate Superannuation Committee.

For comment or information: Senator Andrew Murray 06 277 3709

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