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Turnbull and Morrison must heed warnings on start-up tax rorts



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THE HON CHRIS BOWEN MP SHADOW TREASURER MEMBER FOR McMAHON

THE HON SENATOR KIM CARR SHADOW MINISTER FOR HIGHER EDUCATION, RESEARCH, INNOVATION AND INDUSTRY SENATOR FOR VICTORIA

TURNBULL AND MORRISON MUST HEED WARNINGS ON START-UP TAX RORTS

The Liberal Government’s approach to innovation continues to be exposed as a rushed document more about political marketing than a broad approach needed to transition Australia's economy.

Speakers at last week’s Melbourne Economic Forum warned that the tax breaks set out in the Government’s Innovation Statement could be exploited by people seeking to disguise low-risk investments as innovation funds.

Grattan Institute Chief Executive John Daley told the Forum that it would be difficult to design the Government’s proposed capital-gains tax exemption and 20 per cent non-refundable tax offset in a way “that you can’t drive an accountant’s truck through”.

Shadow Treasurer Chris Bowen said that Government must ensure that promoters of tax-avoidance schemes do not seek to take advantage of its proposed tax breaks for start-ups.

“Tax incentives are an essential element in the innovation system, but they must be effectively targeted so that they will used be genuine investors,” Mr Bowen said.

“Labor flagged the sorts of concerns being raised by Mr Daley when the Government first released the Innovation Statement.”

Shadow Innovation and Industry Minister Kim Carr said that the Government’s Innovation Statement demonstrates that Industry and Innovation Minister Christopher Pyne did not understand the complexity of the national innovation system.

“You can’t just announce some tax breaks in a piecemeal fashion and expect that’s all you need to kick-start an innovative, productive economy,” Senator Carr said.

“An innovation system isn’t built on words and gestures. It requires a suite of measures, including appropriate tax incentives, that will gradually transform the economy, industry by industry and firm by firm.

“When Labor was in government we implemented such a system under our 10-year national innovation agenda, Powering Ideas. But the Abbott-Turnbull Government closed or defunded many of the programs set up as part of Powering Ideas, stripping $3 billion from spending on science, research and innovation.

“In its Mid-Year Economic and Fiscal Outlook statement last week, the Government locked in the cuts to the university sector set out in the 2014 Budget.”

“The cuts to research funding have not been restored and successful programs like Commercialisation Australia and Enterprise Connect have not been replaced. The Government still wants to cut the Research & Development Tax Incentive.

“All that Mr Turnbull and Mr Pyne have delivered is lots of glib talk about being agile, creative and innovative.”

MONDAY, 21 DECEMBER 2015

MEDIA CONTACT: JAMES CULLEN (BOWEN) 0409 719 879 RAY CASSIN (CARR) 0427 126 355