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Industry Research and Development Board Reports 1997-98


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I

RO Industry

Research & Development Board

A N N U A L R E P O R T

9 7 -9 8

I N D U S T R Y R E S E A R C H A N D

D E V E L O P M E N T B O A R D

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Cover photographs courtesy: CEA Technologies, Fairlight ESP, S H Fauldings.

© Commonwealth of Australia 1998

ISSN 1030-3316

ISBN 0 642 28120 3

DIST Publication No. 98/113

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be

reproduced by any process without permission from Auslnfo. Requests and inquiries concerning

reproduction and rights should be addressed to the Manager, Legislative Services, Auslnfo, GPO Box 84,

Canberra ACT 2601.

Designed by Metrographies, Canberra. Printed by Paragon Printers.

C

ontents

Contents Letter of transmittal V Appendixes

Mission statement vi A Board and Committee Membership 55

Vision vii B Official Directions, Declarations and

Appointments 62

Part A: Executive Overview C Conflict of Interest 84

Introduction by the Acting Chairman 1 D Administration 87

The Board:

E R&D Tax Concession Scheme 92

Fostering an innovative

Australia 2

F Concessional Loans 130

The members:

G Competitive Grants Program 133

Steering Australia’s major public

support package for R&D 8

H Discretionary Grants Scheme

1 Generic Technologies Grants

156

Delivering the programs

R&D:

12 Scheme

J National Procurement Development

157

Harnessing Australia’s inventiveness 16 Program 158

Partners in delivery 18 K National Teaching Company

Building for the future:

Scheme 159

A year of achievement 18 L Addresses 160

Part B: Annual Report

Chapter 1:

The Board 20

Alphabetical Index 162

Chapter 2:

Administration of the R&D Tax

Concession Program 24

Chapter 3:

Administration of the R&D S tart

Program 32

Chapter 4:

Administration o f the Innovation

Investment Fund Program 45

Chapter 5:

Communications and Strategic

Development 50

e

I

ndustry Research & Developm ent Board

Senator the Hon Nick Minchin

Minister for Industry, Science and Resources

Parliament House CANBERRA ACT 2600

Dear Minister

I have pleasure in presenting the Annual Report of the Industry

Research and Development Board for the year ending 30 June

1998, prepared in accordance with section 46(1) of the Industry

Research and Development Act 1986.

Yours sincerely

Professor Don Anderson

Acting Chairman

23 October 1998

IR&D

Board

Mission Statement

L

To increase the level

and commercial success

of industry research

and development

undertaken in AustraliP

IR&D Board Annual Renort 9 7 -9 8

IR&D

Board

Vision

By the year 2006, Australia will:

• be a highly competitive location for research and development

• have developed a viable capital market for early stage, technology- based small to medium-sized enterprises

• have encouraged the development of a wide range of investor-ready companies with strong technologies, superior leadership and managerial skills

• have a strategic set of internationally successful, high-technology industries

• have strong support for a national R&D culture.

I R&D Board

------------------------------- I

P art A: Executive Overview

Introduction by the Acting Chairman Australians are an innovative people. A wide range of Australian inventions and technological adaptations are in daily use across the globe.

The country that gave the world the cochlear implant, gene shears and the InterScan aircraft landing system, among many other landmark inventions, has more than pulled its weight historically in the technology stakes.

Australia has a proud tradition of technical innovation extending back beyond the first European settlement. Geographical isolation from traditional sources of technology and daunting communication problems drove the evolution of a community heavily dependent on the innate inventiveness of both its dreamers and its more practical members. Australians

produced ideas, and they invented and adapted to meet the challenges of nation-building.

Tough marketplace Australians have proved that they have the skills and they have the ideas. But in an increasingly competitive, globalised world, a past track record is not enough. New ideas have to be turned into products, services and licences, and have to succeed in a tough

marketplace.

This is where the Australian record of innovation equating with achievement has faltered in recent times. We know that the dreams are there, that the ideas are still flowing, but Australia’s performance in exploiting its skills and abilities has fallen behind expectations. More importantly, the vital ingredient in wealth creation, commercialisation, has become a

stumbling block for many promising developments.

Internationally sourced data shows that, despite some recent improvement, Australia still performs relatively poorly in terms of investing in business R&D and in the commercialisation

of its R&D outcomes.

Commercialisation vital R&D and its commercialisation is widely acknowledged as a key engine of growth in industrial economies.

Australians have prove

that they have the skill

and they have the ideas

But in an increasingly

competitive, globalisei

world, a past track

record is not enough.

New ideas have to be

turned into products,

services and licences,

and have to succeed ii

a tough marketplace.

The experience of the I R&D Board is that in the chain of events that characterises innovation, failure is most likely to occur at the commercialisation stage. It is at this point that technological innovation begins

to be converted into commercial returns.

Today, tastes and technology change rapidly. Information moves fast. Good ideas are quickly copied or superseded. There is constant pressure to come up with something new and better, and success depends

on being able to meet the needs of an increasingly demanding customer base and marketplace.

The firms that will prosper will be those committed to continuous renewal through innovation, firms which are enterprising and skilled enough to differentiate their product and create a distinctive, competitive edge will succeed. The I R&D Board is striving to help these firms through providing support programs that will

help them commercialise innovative products and grow — benefiting all Australians.

Professor Don Anderson Professor Anderson was appointed Acting Chairman of the IR&D Board from 1 July 1998

Part A: Executive Overview

P

art A: Executive Overview

The Board: fostering an innovative Australia Australia needs to develop an ‘innovative culture’.

Innovation is a complex process of interaction and information transmission. It is strongly

influenced by a nation’s culture, particularly by its willingness to reward enterprise and risk­

taking. Australia has an excellent track record in invention and adaptation, but there are still

impediments to the development of a productive national attitude to research and development,

innovation and commercialisation of new ideas.

It is commercialisation that turns ideas and the successful outcomes of research and

development into wealth for the nation. The I R&D Board is conscious that fostering an

environment which rewards innovation is a powerful lever in raising productivity and growth.

The innovation challenge

How do we promote innovation? What are the barriers?

A key challenge for governments is how to effectively encourage greater investment in research and

development. Many studies have demonstrated that the returns to the nation from R&D are high.

This does not always translate into high returns to individual firms from R&D investment because

the benefits of the knowledge and technology generated often spill over to the broader community,

I or are captured by competitors. As a result, firms tend to under-invest in R&D.

By the year 2006

Australia will be a highly

competitive location for

research and

Governments around the world recognise that they have a vital role in encouraging

increased R&D investment in order to maximise national benefits. In Australia, the

R&D programs administered by the Board are central to meeting the innovation

development.

IR&D Board Annual Report 9 7-98

P

art A: Executive Overview

Business Expenditure on R&D 1 9 8 9 - 9 0 prices

$8000m

$7000m

$6000m

$ 5000m

$40 00 m

$3000m

$ 2 0 0 0 m

$1000m

$0m

Total R&D performance - GERD

Public sector (llniv & Govt)

Business sector

8 1 -8 2 8 2 -8 3 8 3 -8 4 8 4 -8 5 8 5 -8 6 8 6 -8 7 8 7 -8 8 8 8 -8 9 8 9 -9 0 9 0 -9 1 9 1 -9 2 9 2 -9 3 9 3 -9 4 9 4 -9 5 9 5 -9 6 9 6-97

Source: DIST. based on ABS data.

Note: ABS tut! R&D surveys are not carried out every year.

International Growth in Business R&D Growth rates in business R&D expenditure (BERD) % real annual increase, 1 9 9 1 to 1 9 9 6

Ireland

Singapore

South Korea

AUSTRALIA

Sweden

Canada

United States

Switzerland

United Kingdom -5

ANNUAL GROWTH IN BUSINESS R&D (%)

This graph shows the average annual grow th rate in international business spending on R&D since 1991. Source: DIST, based on OECD and ABS data.

3 Part A: Executive Overview

P

art A: Executive Overview

challenge, and are helping to develop the creative potential and international competitiveness of

Australian businesses.

Access to finance for commercialisation is essential if firms are to capitalise on their investment

in R&D. There is a need to identify the barriers to funding, particularly for small firms, and to

determine ways of surmounting them. This is where the I R&D Board plays an important role and

has made considerable advances over the last 12 months.

The Board comprises key business and professional people drawn from industry, academia and

government. The Board has responsibility for administering the Industry Research and

Development Act 1986 and to promote the development, and improve the efficiency and

international competitiveness of Australian industry by encouraging research and development.

The members of the Board bring a diverse range of skills and expertise to achieve these

objectives.

Independent decisions

An independent statutory body, the Board provides advice to government on national industry-

based R&D strategies and priorities, and administers specific Federal Government programs

supporting industry-based innovation.

I R&D Board Annual Report 9 7 -9 8

P

art A: Executive Overview

THE BOARD’S POSITION IN GOVERNMENT

Senate standing committees PRIME MINISTER

House of Representatives' Standing Committee on Science and Technology

THE MINISTER FOR INDUSTRY, SCIENCE & TOURISM

The Board began operations on 1 July 1986, replacing the former Australian Industrial Research

and Development Incentives Scheme (AIRDIS) Board, founded in 1976. The IR&D Board’s

statutory functions provide for independent decisions at arm’s length from government.

Aided by a framework of committees and sub-committees, the Board puts into effect the

Government’s program of public support for R&D. But in addition to delivering programs, it

promotes innovation. Its members believe strongly that innovation through focused R&D is a key

strategy for Australia’s future.

In practical terms, the Board has the task of improving business expenditure on R&D (BERD) in

Australia. In addressing this challenge, the Board has proposed that it target:

• improving the intensity of R&D spending in firms already involved in R&D;

• improving R&D participation rates and

• fostering R&D in rapid growth industries.

The pressure for change is accelerating and Board members believe Australia will need to face

up to some hard realities very quickly. We are in the midst of the greatest technological leap

since the industrial revolution — the information era. Australia is well placed to seize on the

opportunities which such change brings. However, we must all work together to develop an

innovation culture within our society. By doing so we will be able to offer future generations of

Australians opportunities similar to, or better than, those available to us.

^ Part A: Executive Overview

P

art A: Executive Overview

THE BOARD'S COMMITTEE STRUCTURE 1 9 9 7 -9 8

THE MINISTER FOR INDUSTRY, SCIENCE & TOURISM The Hon John Moore MP“

THE I R&D BOARD Acting Chairman Dr Terry Cutler1 2‘

The Board's main programs are the:

The Board has three main committees to administer the programs, the:

R&D Tax Concession Scheme

Tax Concession Committee Chair: Trevor Boucher AO

5

H

Fund Management Committee Chair: Professor Peter DoddJ'

The R&D Start Committee is supported by three sectoral committees:

(1) Senator Nick Minchin became Minister for Industry, Science and Resources on 21 October 1998.

(2) & (3) See Appendix A

IR&D Board Annual Report 9 7 -9 8 ^

P

art A: Executive Overview

Relative Value of Tax Concession Distribution of

and the R&D Start program 1 9 9 7 -9 8

R&D Grant Funds 1 9 9 7 - 9 8

This graph shows the distribution o f grants and loans approved by the IR&D Board during 1997-98

Proportion of Expenditure of R&D Tax Concession by Industry 1 9 9 6 -9 7

Large Com petitive R&D Grant payments by State 1 9 9 7 - 9 8

7 Part A: Executive Overview

P

art A: Executive Overview

The members: steering Australia's major public support package for R&D There were 13 members of the IR&D Board on 30 June 1998.

Professor Donald Anderson was appointed Acting Chairman of

the IR&D Board on 1 July 1998.

Professor Anderson is currently Chair of the Queensland Electricity

Reform Unit. He is currently on leave from the University of

Queensland, where he is a professor with the Department of

Commerce.

He holds a Bachelor of Economics and a Doctorate in Philosophy. He has worked as an

economic adviser to government and in private industry. He was also a visiting associate

professor at the School of Business Administration at the University of Michigan.

Professor Yianni Attikiouzel AM is the Professor and Head of Department of

Electrical and Electronic Engineering at the University of Western Australia. He

is also the Director of the Centre for Intelligent Information Processing

Systems. He has spent most of his life working in the electronics and

computing fields. He has served on a number of company boards.

Prof Attikiouzel has a Doctorate in Electrical Engineering and holds a Bachelor

of Science (Honours) in Electrical Engineering. He has a thorough knowledge of electrical and

electronic engineering and intelligent information processing systems. He is a Fellow of the

Institution of Engineers Australia, the Institution of Electrical Engineers (UK), and the Institute of

Electrical and Electronic Engineers (USA).

Andrew Bain is the head of Auslndustry within the Department of Industry,

Science and Tourism. He has an honours degree in economics and a

Diploma of Agricultural Science. Since joining the Australian Public Service in

1968 he has worked in the Bureau of Agricultural Economics, the Industry

Commission and the Department of Prime Minister and Cabinet and has

held senior executive positions in the former Department of Industry,

Science and Technology.

Mr Bain has held private sector and overseas appointments and was Director General of IP

Australia for five years.

By the year 2006

Australia will have

developed a viable

capital market for early

stage, technology-based

small to medium-sized

enterprises.

IR&D Board Annual Report 9 7 -9 8

P

art A: Executive Overview

Trevor Boucher AO is the Chair of the Tax Concession Committee. He is a former

Commissioner of Taxation and was one of Australia’s most distinguished public

servants. Mr Boucher’s association with the Australian Taxation Office spanned

37 years. He held the position of Australian Ambassador to the Organisation for

Economic Cooperation and Development (OECD) from 1993 to 1995.

Mr Boucher holds a Bachelor of Law, and is a Fellow of the Australian Society

of Certified Practising Accountants.

Leslie Butterfield is a business development manager with Lend Lease

Property Services. She was the inaugural Vice President of the National

Association of Women in Construction and its NSW Chapter President.

Ms Butterfield holds a Bachelor of Science in Civil Engineering. She has

previously worked with major construction companies in New York and

Boston. Her expertise lies in large-scale project management, construction

and business development.

John Cromie is the Managing Director of Open Software Associates. His areas

of expertise include software, communications and electronics. Prior to

founding OSA, he had a distinguished 12-year career with Hewlett-Packard,

culminating in his becoming Division General Manager of HP’s Australian

software operation.

Mr Cromie has a Bachelor of Engineering (Electrical) and is a Fellow of the

Australian Institute of Company Directors. He has served on several industry advisory boards

and was CEO of the Collaborative Information Technology Research Institute (CITRI), then

Australia’s largest IT research institute.

Dr Carmel (Carrie) Hillyard is the Managing Director of Bionetworks Pty Ltd

which specialises in innovation management and providing advice on the

protection of intellectual property and the commercialisation of R&D.

For 15 years Dr Hillyard worked at the prestigious Royal Postgraduate

Medical School at London University followed by eight years as R&D director

with AGEN, a Brisbane biotechnology firm. She has a Doctorate in Medical

Biochemistry. Her areas of expertise include medical biochemistry, chemical pathology, molecular

biology, health, diagnostics, and pharmaceuticals. She is perhaps best known for her role in

managing the development of the two-minute AIDS test.

^ Part A: Executive Overview

P

art A: Executive Overview

Dr Leanna Read is the Company Secretary of GroPep Rty Ltd and the Director

of the Child Health Research Institute in South Australia.

Dr Read previously worked as a research scientist at the CSIRO Division of

Human Nutrition, and as a lecturer within the Department of Animal Sciences

at the University of Adelaide. She has a Doctorate in Biochemistry and a

Bachelor of Agricultural Science. She has research experience in paediatrics

and biotechnology. She is the Chair of the R&D Start Committee and the Biological Committee.

Peter Robson is an industry adviser with the national consultancy group

Price Waterhouse Coopers and an executive director of the Newport

Capital Group.

He spent 15 years in senior management positions in manufacturing. He

has previously been the National Secretary of Australia's largest trade

union, the Community and Public Sector Union (CPSU), a member of the

Australian Manufacturing Council, as well as a director of AIDC Ltd and NRMA Life. He is a

Master of Commerce (Economics) and a Bachelor of Chemical Engineering.

Dr Susan Ryan AO is a Visiting Scholar in the Department of Government at

the University of Sydney. A former Commonwealth Minister, she was first

elected to the then ACT Legislative Council in 1974. Dr Ryan was elected to

the Senate in 1975 and was later appointed as the Minister Assisting the

Prime Minister on the Status of Women and the Minister for Education.

Dr Ryan was awarded an Honorary Doctorate of the University by the University

of Canberra in 1998 for her contribution to politics and the status of women. She also holds

Bachelor of Arts and Master of Arts (English Literature) degrees.

Olga Sawtell is the Executive Director of Keenfern Pty Ltd. She holds

degrees in arts and law and has worked in the telecommunications and IT

industries for the past 14 years. Mrs Sawtell worked as CEO of ACESAT

Pty Ltd and CBD Information Technology. She has been a Director of the

Australian Electrical and Electronic Manufacturing Association for seven

years and is the past Chair of the Satellite Products and Consumer

Equipment (SPACE) Association.

I R&D Board Annual Report 9 7 -9 8

Part A: Executive Overview

Su-Ming Wong is the Executive Director of Australian Mezzanine Investments

Pty Ltd. He is also a Director of Hypertec Pty Ltd and Blue Line Cruises. He

was a Director for ANZ Capel Court Ltd and has also worked with the First

National Bank of Boston.

He holds a Master of Engineering, a Master of Business Administration and a

Bachelor of Engineering (Civil Engineering). His area of expertise is in venture-

capital investments with a particular focus on export competitive Australian companies. He is

Chair of the Engineering and Manufacturing Committee.

John Bertrand AM is Chairman of the IR&D Board141. He is co-founder and

Vice Chairman of Quokka Sports Inc, a digital sports media company now

based in San Francisco. He was Chairman of the 1995 oneAustralia

America’s Cup challenge and overall has campaigned and competed in five

America’s Cup challenges. He has extensive experience in mechanical

engineering, fluid dynamics and the marine industry. An Olympic Medallist

and world champion, he skippered Australia II to victory in the historic 1983

America’s Cup. Mr Bertrand graduated with an honours degree in Mechanical Engineering and a

Master of Science from MIT in Boston.

During the financial year three members finished their service with the Board. They were:

jnjHB

Dr Terry Cutler, who was the

Acting Chairman during most

of the 1997-98 financial

year. He resigned from the

Board on 19 June 1998

owing to other work

commitments. 4

Michael Dillon, who was the

Executive General Manager of

the Office of Auslndustry and

an ex-officio member of the

Board until 8 June 1998

when he left to take up

another appointment.

Professor Peter Dodd, Dean

and Director of the Australian

Graduate School of

Management at the University

of NSW, who resigned from

the Board on 29 January

1998.

(4) In late 1996 the Minister accepted an offer by Mr Bertrand to stand aside as Chairman during the course of

an independent inquiry into the Southern Cross Syndicate of which he is Chairman. The inquiry found no

impropriety on the part of Mr Bertrand.

Part A: Executive Overview

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art A: Executive Overview

Delivering the programs Since mid-1993, the Board has approved some 578 grant applications under the R&D Start

program and its predecessors, totalling nearly $380 million. In addition 106 loan applications

totalling more than $33 million have been approved. Under the R&D Tax Concession scheme,

firms collectively have made claims totalling more than $15 billion over the life of the program.

This support, representing the largest package of public funding for industry R&D in Australia,

was delivered under two umbrella programs: R&D Start and R&D Tax Concession.

During the year the new Innovation Investment Fund (IIF) came into operation to provide

Commonwealth funds in the form of equity venture capital, primarily for small, new-technology

companies commercialising research and development outcomes.

R&D Start The R&D Start program provides matching funding on a competitive basis for R&D and

commercialisation projects. Projects are assessed against merit criteria which include

management capability, commercial potential, technical strength, national benefits and

funding need.

International R&D Performance

Singapore

Ireland

Canada

AUSTRALIA

United Kingdom

South Korea

United States

Switzerland

<%)

I %BERD/GDP- □ %GVERD/GDP - L J '4HERD/GDP - Q other Π GERD/GDP

Business Government Higher Education

Source: DiST, based on OECD and ABS data.

IR&D Board Annual Report 97-98

Part A: Executive Overview

The program’s main feature is that it provides flexible funding for both large and

small R&D and commercialisation projects. This includes both grants and loans to a

maximum of $15 million, for up to three years.

The objectives of R&D Start are to:

• increase the number of company R&D projects with high commercial potential;

• foster innovation in Australian businesses;

• encourage greater commercialisation of outcomes from R&D projects; and

• support R&D projects involving companies working together, or working with

research institutions.

In 1997-98, R&D Start provided financial assistance to firms in the following ways:

• grants for R&D projects in SMEs developing internationally competitive products, processes

or services which demonstrated significant commercial potential;

• grants for graduate-based R&D-related projects to promote links between industry and

tertiary institutions. These grants provide support which enables companies to employ

graduates on R&D-related projects;

• grants for collaborative R&D projects, awarded to encourage collaboration between

Australian companies and research institutions; and

• concessional loans awarded to small companies to allow early commercialisation of

technological innovations in goods, systems or services.

During 1997-98 the Government's Investing for Growth statement announced that program

funding would increase by $556 million, bringing the total expenditure to $739 million over the

period July 1998 to June 2002.

The Government’s expansion of the program means the new R&D Start program will have a

wider eligibility than in the past, applying to all non-tax-exempt companies incorporated in

Australia. This will allow more firms to undertake high risk and/or high return R&D and

commercialisation activities. The expanded R&D Start program will have three elements:

Core Start, providing assistance of up to 50 per cent of project costs for smaller Australian

companies through grants for R&D projects, grants to support company employment of

graduates on R&D-related projects, and through loans for the early commercialisation of

technological innovations.

By the year 2006

Australia will have

encouraged the

development of a wide

range of investor-ready

companies with strong

technologies, superior

leadership and

managerial skills.

Θ Part A: Executive Overview

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art A: Executive Overview

Start Plus, providing grants of up to 20 per cent of project costs for larger Australian companies

(those with group turnover of $50 million or more) to undertake R&D projects.

Start Premium, offering all companies an additional repayable amount which ‘tops up’ grants

under either Core Start or Start Plus to a maximum of 56.25 per cent of project costs.

Innovation Investment Fund During the year the I R&D Board played a key role in implementing the new IIF program after

research indicated that Australian firms — particularly new-technology firms — encountered

great difficulty in raising equity capital in the range of $500 000 to $2 million. The program was

developed after a joint Auslndustry and I R&D Board delegation visited various overseas countries

and returned with a proposal for the Innovation Investment Fund (IIF), modelled on the successful

venture capital programs of the USA and Israel.

Under the program, funds are managed by private sector fund managers appointed and

monitored by the Board’s Fund Management Committee.

The Government has provided $230 million for investment on a 2:1 basis with private

sector capital.

Renewable Energy Equity Fund The Government announced in November 1997 that $21 million would be earmarked for a

Renewable Energy Equity Fund (REEF), formerly known as the Renewable Energy Innovation

Investment Fund, and based on the IIF model. Commonwealth funding is to be matched at a

maximum of 2:1 with private sector capital.

R&D Tax Concession|5) More than 3000 Australian companies receive direct tax benefits from the R&D tax concession.

In terms of cost and number of participants, the concession is the largest of the Board’s R&D

support programs.

The R&D Tax Concession program is jointly administered by the Board and the Australian

Taxation Office. Over the past 13 years the tax concession, which is broad-based and market-driven, has played a significant role in increasing the level of business expenditure on R&D.

(5) The R&D Tax Concession scheme is an entitlement-based program. The eligibility of claims is governed

by the criteria set out in the relevant legislation. The above information is designed only as an outline. If

you are interested in applying for a tax concession and want more information, or want to apply for

registration, please contact the relevant Department of Industry, Science and Resources state office

listed at the back of this publication. The state office will be able to provide you with a client information

kit, which includes an application for registration of R&D activities.

IR&D Board Annual Report 97-98

P

art A: Executive Overview

Information Requested July 1 9 9 7 -J u n e 1 9 9 8

PM Statement 2 %

What can Auslndustry do for me? 10 %

What is Auslndustry 11.5%

Source: Based on statistics provided over four quarters from the Auslndustry Hotline.

During the 1996-97 financial year Australian companies seeking the concession claimed about

$4.2 billion of R&D activity, and the cost to the Government for the year 1997-98 has been

estimated at $350 million.

The scheme enables companies incorporated in Australia and public trading trusts which register

claims with the Board to deduct up to 125 per cent of eligible R&D expenditure when lodging

their corporate tax returns. This reduces the after-tax cost of R&D to 55 cents in the dollar. To

attract the full 125 per cent concession, however, total expenditure on R&D in any one year must

be $20 000 or more unless the R&D is contracted to a Registered Research Agency (RRA).

RRAs are research organisations that are registered with the Board and have demonstrated that

they have the expertise and facilities to undertake certain types of R&D on behalf of firms.

Companies can also benefit from the concession by contracting out R&D work to other

companies.

Part A: Executive Overview

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art A: Executive Overview

R&D: harnessing Australia's inventiveness

By the year 2 0 0 6

Australia will have

strong support for a

national R&D culture.

Australia is facing growing opportunities and challenges which will have far-reaching

effects on our economic strength and social welfare. Changes occurring within

industry, education and science are likely to be so profound that, as a nation, we need

to plan now for ways of securing our future welfare.

R&D and its commercialisation are widely acknowledged as key engines of growth in

industrial economies such as Australia.

Australia can secure its future only by continually creating new areas of competitiveness,

enhancing efficiency and achieving greater productivity. The building blocks for improved

competitiveness are the skill, knowledge and capabilities of the Australian people together with

our natural assets and the infrastructures created over many years in science, education, energy,

transport, finance and communications.

The Government, industrialists, scientists, financiers, educators, and the wider Australian

community need to work together to achieve our full potential as a nation.

Globalisation and the explosion of technical know-how have increased the importance of R&D for

economic competitiveness and growth in international trade. Understanding the significance of R&D

for competitiveness and future economic growth is vital to Australia’s future economic well-being.

Products must be designed and brought to market more swiftly and at lower cost if an industry is

O c

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V )

< /)

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Sound effects g et R&D green light An R&D Start Large Grant o f $2 million is keeping Fairlight ESP

ahead o f the game in professional digital audio production

systems. The company pioneered two innovations that transformed

music making (sampling and sequencing) 20 years ago. It has

added $2.8 million o f its own money to the I R&D Board grant,

maintaining an R&D spending rate o f 9 to 12 per cent o f sales.

From small beginnings, Fairlight ESP has become a major player is

post-production audio worldwide, and is the first choice for Japan’s national public broadcaster,

NHK. There are now 250 Fairlight systems in Hollywood movie studios alone.

I R&D Board Annual Report ’97-'98 16

P

art A: Executive Overview

to maintain its competitive edge. For example, the computer industry obtains 78 per cent of its

revenues from products that have been on the market for two years or less.

Australia needs to develop an ‘innovative culture’ where innovation is recognised as the

development of new products and services and improved methods of producing them. And the

two main elements of innovation are R&D and commercialisation.

Each of these elements can be further segmented by identifying potential market opportunities

on the basis of generic firm characteristics and industry sectors. The Government and the I R&D

Board seek to help Australia’s most innovative firms achieve to their best potential —

recognising the rewards that innovation can bring.

Innovation can be generated from anywhere within our society. However, converting opportunities

in a way that generates wealth requires a dynamic private sector and powerful interaction and

communication within the system. This is the goal that government policy and support programs

are seeking to achieve.

Australia’s track record with R&D has not been as good as it should be. While the share of

business expenditure in GDP has improved over the last 10 years, Australia still ranks 16th out

of 19 OECD countries in terms of business research and development.

However, some of those companies that do engage in R&D do so very successfully and are

among the best in the world.

Laser technology for skin treatment With half a million dollars already invested in developing a

copper bromide laser system for medical use, and problems

still to be resolved, Norseld needed help to get it to the

market. With a $236 250 three-year grant from the IR&D

Board, the company is now the only commercial

manufacturer o f copper bromide lasers in the world. The

copper bromide laser tube generates very high-powered

yellow and green light which is absorbed in selective ways. This has enabled the treatment of

conditions beneath the surface of skin, such as ‘port-wine stain ’ birthmarks, as well as benign ( / )

pigmented lesions such as age spots and freckles. With the help o f the IR&D Board grant, the

company has been able to extend its technology into industrial as well as medical applications.

o =0 ■ <

17 Part A: Executive Overview

P

art A: Executive Overview

The current financial climate tends to be unfavourable to R&D. Business has to keep a closer

eye on the bottom line, looking for a short-term return from every dollar spent. However,

research is generally a long-term investment: the cochlear implant, for example, was many years

in the making.

The challenge for Australia is to confront our future, to learn from global experience and to see if

we can develop creative ideas to enhance our prosperity. Companies need to recognise that

investment in R&D is a key driver for growth and will better position them for the future.

Partners in delivery Administrative support to the IR&D Board is provided by Auslndustry, a division of the

Department of Industry, Science and Tourism. Auslndustry staff, including state offices, provide

analysis, technical assessments and promotional services to the Board. Secretariat support is

provided by a specialised unit within Auslndustry.

The Commonwealth Development Bank works closely on the Concessional Loans programs and

provides financial assessments and advice.

The Commissioner of Taxation works with the Board in the administration of the R&D Tax

Concession Scheme.

Building for the future: a year of achievement • A total of $149 million in grant and loan offers for 189 projects was made by the IR&D

Board under the R&D Start program in 1997-98.

• There was continued strong demand for support from good quality projects. This was

reflected in the high level of support given, both in dollars and numbers of approvals. The

continuing strong demand for larger projects suggests the program is encouraging firms to

take on major projects.

• The estimated cost to government of concessional benefits under the R&D Tax Concession

Scheme is about $350 million.

• A new venture capital initiative, the Innovation Investment Fund (IIF) is near completion with

the signing of first round management licence agreements by fund managers at the end of

the financial year.

• Expansion of the R&D Start program saw work on the introduction of three new elements:

R&D Start Core, Plus and Premium.

IR&D Board Annual Report 97-98

vv

Part A: Executive Overview

S U C C E S S S T O R Y

Horizons Unlimited Canberra-based CEA Technologies, a home-grown centre o f excellence in

world-class radar surveillance and communications systems capability, has

topped o ff 15 years o f research, design and development with a milestone

partnership with British Aerospace Australia (BAeA). The two companies joined

forces in March 1998 to further develop and commercialise a ship defence

system, the CEA-Mount illuminator. In December 1997 the IR&D Board

approved 50 per cent funding o f the $5.9 million cost of the project. The

system is a continuous-wave illumination transmitter offering weight and power advantages over current

models, enabling it to be installed in much smaller vessels than traditional systems. CEA has other

major contracts with the Australian and US navies and recently installed an advanced vessel tracking

radar system into Sydney Harbour and Port Botany.

High-technology 'instant lawn ' Strath Ayr Pty Ltd received a grant o f $273 804 in March 1996 under

the R&D Start program to develop a self-loading ‘PaveAyr’ machine

which lifts pre-laid root zone material, mixes ‘ReFlex’ (a polymer mesh

reinforcement) and other additives and places the matrix into

position. StrathAyr technology will feature at Old Trafford, the home

ground of the English soccer team Manchester United, and at Singapore's new $1 billion Kranji

Racecourse. It will also be used at the Sydney 2000 Olympic Games, rapidly converting the Sydney

Showground pitch from equestrian use to baseball configuration.

Aerospace alloys g et lift-off A producer o f alloys for high-technology components in aircraft turbines is flying

high with $2.54 million in grants from the R&D Start program. Western

Australian Specialty Alloys (WASA) Pty Ltd received its first grant in 1995 to

develop process technology for producing aerospace quality super alloys. In

1997, the company received a further grant to develop a technique for

removing fine impurities from alloys used in aircraft turbines. Alloys from

Europe and North America are treated for use in rotating je t engine parts,

resulting in ‘super clean ’ triple-melted super alloys. WASA believes R&D is critical to keeping ahead of

its world competitors.

19 Part A: Executive Overview

C

hapter 1

1 The Board

The Government’s industry research and development programs are administered by the

Industry Research and Development Board (IR&D Board). They are the principal means by which

research and development in industry is supported. The Board’s purpose is to increase the level

of research and development activity undertaken in Australian industry and to improve the

commercial success of R&D outcomes.

Legislation

The Board was established on 1 July 1986 under the Industry Research and Development Act

1986. The object of the Act is to promote the development of Australian industry, and to improve

its efficiency and international competitiveness, by encouraging research and development.

Functions The Board's functions are set out in the Act and in specific Ministerial Directions. They are:

• administering programs including the R&D Start program and the Innovation Investment

Fund (IIF);

• administering aspects of the R&D tax concession offered to encourage research and

development;

• advising the Minister on the allocation of funds between programs;

• studying R&D opportunities and problems, as well as identifying areas needing assistance;

• promoting and marketing R&D projects and programs, pointing out the opportunities and

benefits they bring;

• maintaining awareness of trends and activities in R&D in Australia;

• monitoring the effectiveness of the programs it administers;

• fostering greater exchange and collaboration between Australia’s research and

development agencies and their overseas counterparts; and

• advising the Minister on the funding of these activities.

In fulfilling these functions, the Board is involved in a wide range of analytical tasks, discussions,

inspections, briefings, fact-finding exercises and other activities in support of its decision-making

and advisory roles.

IR&D Board Annual Report 97-98

C

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Powers

Section 8 of the Act gives the Board power to take all necessary action to ensure the proper

performance of its functions.

Membership

During 1997-98 the Board continued to be responsible to the Minister for Industry, Science and

Tourism, the Hon John Moore MP. Its members are predominantly from the private sector with

industry and professional backgrounds. Their qualifications and experience range over a large

number of commercial and technical areas of expertise.

Mr John Bertrand AM remained as Chairman of the Board throughout 1997-98. In late 1996 the

Minister accepted an offer by Mr Bertrand to stand aside as Chairman during the course of an

independent inquiry into the Southern Cross Syndicate of which he is also chairman. Mr Moore

appointed Mr David Jackson QC to conduct the inquiry, which followed media allegations relating to

the administration of the syndicated research and development program and the operation of the

Southern Cross Syndicate. Mr Jackson's report found no impropriety on the part of Mr Bertrand.

Dr Terry Cutler was appointed as Acting Chairman of the IR&D Board on 25 September 1996,

and held this position until he resigned from the Board on 19 June 1998 owing to other work

commitments.

The membership of the Board and its committees as at 30 June 1998 is set out in detail in

Appendix A.

Organisation and Management

Committees

The principal committees reporting to the Board are:

• the R&D Start Committee, which assists in administering the R&D Start program. This

committee is supported by three sectoral committees:

- the Engineering and Manufacturing Committee;

- the Information Technology and Telecommunications Committee; and

- the Biological Committee.

• the Tax Concession Committee, which focuses on the administration of the R&D tax

concession; and

• the Fund Management Committee, which administers the Innovation Investment Fund

program.

Chapter 1

C

hapter 1

Appendix B provides details of official directions, declarations and notifications of appointments

issued to the Board in 1997-98. Appendix C provides details of procedures to avoid potential

conflicts of interest by Board and Committee members.

Administrative Support A specialist I R&D Board Secretariat Section in the Office of Auslndustry, within the Department

of Industry, Science and Tourism, services the I R&D Board and its committees. The Department

provides audit and financial support for the grant and loan activities of the Board and is

responsible for marketing and evaluating the Board’s programs. Appendix D provides details of

staffing and funding.

State Office Support The Department of Industry, Science and Tourism also assists in the administration of the

Board’s programs through its state offices in Adelaide, Brisbane, Hobart, Melbourne, Perth

and Sydney.

Case officers, based in the states, deal directly with applicants, providing advice and guidance in

the preparation of expressions of interest, applications for grants and loan assistance. They also

provide feedback to applicants. The case officers are responsible for formal project

management, but also build and maintain relationships with clients through informal consultation

on research and development grants, or tax-related projects.

State offices also provide advice about other programs within the Industry, Science and Tourism

portfolio, aimed at improving business management and industry development.

Operations

The Board carries out its operations through its committee structure. Committees have specific

delegations to administer the various Board programs.

Administration of the R&D tax concession is a responsibility shared by the Board and the

Australian Taxation Office. The Board handles the registration of companies claiming the

concession and determines whether their R&D undertakings are eligible under the legislation.

Innovation and the commercialisation of research outcomes are key issues in decisions by the

R&D Start Committee, and its sectoral committees, on grant and loan applications. They look for

a clear and realistic plan for development and marketing of the new product or process

concerned. The Committee works closely with the Commonwealth Development Bank, which

carries out financial assessments on proposals for the Board and manages loan contracts on

behalf of the Commonwealth.

I R&D Board Annual Report 97-98

Chapter 1

Meetings The I R&D Board held 11 formal meetings during the financial year as follows:

16 July 1997 Sydney

29 August 1997 Adelaide

8 October 1997 Canberra

17 November 1997 teleconference

21 November 1997 Sydney (Extraordinary Meeting)

4 December 1997 Brisbane (Extraordinary Meeting)

5 December 1997 Brisbane

28 January 1998 Melbourne

11 March 1998 Sydney

24 April 1998 Adelaide

3 June 1998 Canberra

Chapter 1

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hapter 2

2 Administration of the R&D Tax Concession Program

Introduction

Under the chairmanship of Mr Trevor Boucher, the Tax Concession Committee (TCC), supported

by the Office of Auslndustry, which provides operational support for the administration of the tax

concession, acted to improve the handling of the program’s workload. Stronger liaison with the

Australian Taxation Office (ATO) led to a more cooperative approach to case management.

The Committee significantly increased the delegation of its powers to officers of the Office of

Auslndustry. This allowed the Committee to focus its attention on program management issues

and the review of unfavourable determinations disputed by companies.

During the latter half of 1997-98 the Government prepared legislation to increase business

access to the R&D tax concession and to improve the effective operation of the scheme. This

amending legislation was introduced into Parliament on 1 July 1998.

Activities of the Committee

The abolition of syndication for new applications in 1996, and increased delegation of the

Committee's power to determine the eligibility of R&D activities to officers of the Office of

Auslndustry, has resulted in the Committee giving greater attention to program management

matters. This included a meeting of Committee members and several IR&D Board members on

5 February 1998 to discuss issues surrounding the definition of R&D. A number of options for a

revision of the R&D tax concession were put forward, which also served as input to a

departmental discussion paper and to the industry consultation process relating to a proposed

clarification of the definition of eligible R&D.

The Committee also devoted an increasing proportion of its time to considering how to improve

and make more effective the operation of the concession. This included the proposal to develop

framework papers to assist applicants to better understand the requirements of the concession

and the approach being adopted by the Board to a range of issues. Another issue was the

development of principles for the monitoring of active R&D syndicates. These and other matters

are referred to below.

Professor Elizabeth More's term of office with the Committee expired with effect from 30 June

1998.

IR&D Board Annual Report 9 7 -9 8 f'fjj

Chapter 2

Public Relations Activities

Mr Boucher gave two public presentations on syndication issues. These were at a KPMG seminar

on 10 November 1997 in Sydney and at an AIC conference on 31 March 1998, also in Sydney.

Mr Boucher assisted with a public presentation on legislative changes to the tax concession

given in Canberra on 27 July 1997.

Mr Graham provided a presentation to a departmental workshop for tax assessors in Melbourne

on 16-17 October 1997.

Meetings

Committee meetings were held as follows:

11 August 1997 Canberra

1 October 1997 Sydney

6 November 1997 Canberra

17 December 1997 Melbourne

4-5 February 1998 Canberra

18 March 1998 Sydney

5 May 1998 Melbourne

10 June 1998 Canberra

23 June 1998 teleconference

Measures to Improve Efficiency During 1997-98 the Committee and the Office of Auslndustry took several measures to increase

the efficiency of the administration of the R&D tax concession.

A comprehensive risk management strategy was developed, which will allow the Committee to

better focus its resources on those applications for the concession where the risk of ineligibility

is greatest.

By delegating to officers of Auslndustry its power to determine the eligibility of R&D activities for

the concession, the Committee is now in a position to focus on company appeals against

unfavourable determinations and on issues of a policy nature. Thus the Committee is now more

focused on those elements of its work that are of the greatest significance to the overall

operation of the concession.

Chapter 2

Chapter 2

During the year 12 technical assessors were recruited on contract to complement in-house

resources. This has allowed greater use of expert knowledge in the assessment of eligible

R&D activities.

The R&D assessor training scheme initiated the previous year was continued, based on six-

monthly workshops and the placement of junior assessors under the tutelage of more senior

assessors. Measures were taken aimed at improving the presentation and content of

assessments, quality control and consistency of reports.

Liaison with the Australian Taxation Office

The work of the Committee benefited from increased interaction between Auslndustry and the

ATO. Case managers from both agencies met regularly to develop priority lists for case selection

and exchange intelligence on individual investigations. An ATO observer at Committee meetings

continued to provide regular reports on particular issues to the Committee, and quarterly formal

liaison meetings continued between officers of Auslndustry and the ATO to coordinate action.

Auslndustry assessors and ATO officers also met twice during the year at assessors' workshops.

Risk Management and Monitoring The Committee continued to strengthen its monitoring procedures and policies by contributing to

the development of a comprehensive risk management strategy for all Board programs with the

assistance of consultancy expertise. The risk management strategy for the general concession is

being reviewed with a view to developing a risk management procedures manual.

The monitoring of syndicates was a continuing activity of the Committee. Details of the

monitoring strategy for syndicates are described later in this chapter.

Legislative Changes

The Government’s Industry Statement Investing for Growth, released on 8 December 1997,

stated that the Government would take measures to make the R&D tax concession more

accessible to business and to ensure that the concession would operate more effectively. In

particular, the Government would introduce measures to streamline registration and lodgement

requirements, consult with industry to clarify the definition of eligible R&D, and review other

provisions to ensure the integrity and efficiency of the concession.

On 1 July 1998 the Government introduced into Parliament a Bill to give effect to the

intentions expressed in the Industry Statement. The Bill proposed a range of measures,

including the following:

IR&D Board Annual Report 97-98

C

hapter 2

• extending the period within which applications must be lodged with the Board from six

months to 10 months;

• providing the Board with discretionary power to accept late applications in exceptional

circumstances;

• allowing the Board flexibility in the information required from companies registering for the

concession; and

• requiring companies claiming the concession to keep contemporaneous records supporting

their claims.

During the first half of 1998 consultations were held with industry to determine a possible

clarification of the definition of eligible R&D. For a variety of reasons industry favoured retention

of the current definition, and on 2 July 1998 the Government announced that the current

definition would be retained.

Interpretation of the Acts During the year the Federal Court and the Administrative Appeals Tribunal (AAT) handed down a

number of decisions which had a direct influence on the decisions made by the Committee.

A decision made by the Federal Court involving the claimed R&D activities of a computer

software company (the Unisys case) established important principles regarding the interpretation

of the terms ‘innovation’ and ‘technical risk' in the definition of eligible R&D in the Income Tax

Assessment Act 1936 as applied to activities undertaken prior to 23 July 1996. In the matter of

a different company, the AAT also made a decision on an application for the tax concession in

relation to the term ‘newness’.

Such Federal Court and AAT decisions provided the Committee with assistance in the legal

interpretation of the definition of eligible R&D.

To enable companies to apply for the concession with greater certainty and to enable the

Committee to make decisions with greater understanding and consistency, the Committee

decided that a number of framework papers should be prepared on key issues relating to the

concession. These papers are to specify how various provisions of the Income Tax Assessment

Act 1936 and the Industry Research and Development Act 1986 are to be interpreted by the

Board for the purposes of the R&D tax concession. During 1997-98 the Committee approved

a draft framework paper on the eligibility of computer software. Other topics to be covered

include: What is R&D?; Where does R&D end and commercialisation begin?; Registration and

Ineligible activities.

Chapter 2

C

hapter 2

Litigation Status

During 1997-98 three Federal Court and 27 AAT matters ensued as a result of reviews of

decisions made by the Committee.

Of the Federal Court matters, one was an appeal initiated by the Board arising from a decision of

the AAT and resulted in a decision in favour of Unisys (see previous page). In the other two

matters the Federal Court handed down decisions favourable to the Board, although some

common law elements of one of the matters are still pending.

Monitoring the Syndication Experience At 30 June 1998, there are a total of 245 registered syndicates, including those registered by

the IR&D Board under transitional arrangements approved by Parliament when the legislation

terminating R&D syndication was passed in December 1996. Almost 95 per cent of allowable tax

deductions have now been claimed. The value of R&D expenditure for all registered syndicates is

some $1.5 billion and core technology amounts to $2.3 billion.1 1 1

Together, registered syndicates represent a taxpayer subsidy of an estimated $1.7 billion.2 1 It is

therefore in the interests of all Australians that syndicated R&D projects are completed as

proposed and, where successful, every effort is made by the syndicates to exploit them

commercially. This position is the stated policy of the Board.

To date, the stage at which syndicates have run into problems has been at the end of the R&D

phase when more money is required, at risk, to pursue commercialisation of successful R&D

outcomes. Syndicate investors have a responsibility to take on this risk to ensure real efforts are

made to see projects through the commercialisation phase.

To that end the Board is determined to monitor syndicates closely, and increased resources are

being applied by the Department of Industry, Science and Tourism to compliance-monitoring

activities. This will allow a far deeper level of scrutiny of a greater number of individual

syndicates.1 3 1

A further result of the increased resource investment is in the form of regular contact with

syndicates by the department. Every active syndicate is expected to undergo a detailed review

within the next two to three years.

(1) See Appendix E, Table E.6, Syndicate Status and Financial Figures.

(2) See Appendix E, Table E.7, Syndicates by Industry Sector and Financial figures.

(3) See Appendix E, Table E.8, Syndicate Monitoring Statistics.

IR&D Board Annual Report 9 7 -9 8

C

hapter 2

During March/April 1998 a review of a random sample of 40 R&D syndicates was undertaken.

The objective was to obtain an overall impression of progress of syndicates and did not

constitute a review of individual syndicates. However, this preliminary analysis did raise the

following general concerns:

• that syndicates appeared to perform reasonably well in terms of their proposed R&D

conforming to plan and in the achievement of R&D milestones. However, the volume of

reported new patent property appeared surprisingly limited given the stated success rate,

the size of the core technology base, and the level of R&D investment.

• given the substantial investment involved ($12 million per syndicate on average), it was

expected that the commercialisation reports from syndicates would be of the standard

generated for corporate boards. The review found that none of the syndicates produced

information of this quality. It also appeared that very few syndicates had a properly

constructed business plan or were using such a plan to monitor their progress following the

conclusion of the R&D phase.

• in the majority of cases the researcher was also the nominated marketer. Furthermore, in

more than half the syndicates in the sample portfolio the nominated marketer did not

appear to have the necessary commercialisation experience or the financial capability to

carry out the marketing program.

• it appeared that few syndicates had yielded much commercial return. Even where there had

been some significant commercial return, it was far below the sales forecast at the time of

registration. It was found that the major contributing factors to the under-performance of

these syndicates appeared to be a lack of commercialisation expertise and/or planning

(75 per cent) and funding constraints (70 per cent).

Following this preliminary analysis, an action agenda was developed, incorporating new and

existing information to develop a more systematic and comprehensive approach to the

monitoring of commercialisation performance. The focus of the action agenda is first and

foremost to provide encouragement to those undertaking relevant commercialisation. This is

closely followed by the need to fulfil obligations to the taxpaying public in ensuring recovery

action against those syndicates not making a genuine effort to commercialise.

The Board expects a level of project management commensurate with the size of the projects

and to a standard considered appropriate in the private sector for investments of this magnitude.

It believes investors must take the same interest in, and employ the same mechanisms for, the

syndicated R&D projects as they would for any other project they were undertaking directly on

their own behalf.

Chapter 2

C

hapter 2

The Board considered that this action agenda would provide an appropriate and systematic

framework for pursuing the intended commercial objectives of the R&D syndication scheme. This

approach would assist the Board to ensure that Australia obtains the maximum commercial

return for the substantial investment made by the Government on behalf of the taxpayer in

syndicated R&D.

Despite some general concerns about R&D syndicates, the IR&D Board continues to be

impressed by the outstanding success of some individual syndicates. The syndication success

story in this chapter are just two indications of many such examples.

S Y N D I C A T I O N S U C C E S S S T O R I E S

Aerosonde syndicate A Melbourne-based company, Sencon Environmental Systems, conducted

the research for the syndicate in conjunction with the Bureau of

Meteorology Research Centre. The aim of the project was to harness

converging aeronautical, computing and communications technologies and

develop a weather reconnaissance instrument that could economically

monitor the remote areas of Australia and its surrounding oceans. The result of the research was a

small 20cc-engined robotic aircraft with a wingspan of only 3m. called an Aerosonde. Although small,

the 15kgaircraft is designed to withstand stresses up to 15 times the force of gravity (a passenger

aircraft withstands around five times the force of gravity). The Aerosondes strength allows it to fly

into cyclones to gather important weather information. This information will help meteorologists

improve their understanding of cyclones and therefore improve their ability to forecast them.

The demand for the Aerosonde is soahng and more than 30 aircraft have already been sold to the

US and Taiwan. A group of 10 Aerosondes is currently Hying in the South China Sea in an important

research project on the Asian monsoon. The output of Aerosondes is anticipated to double in the

second year of production, with exports expected to account for 70 per cent of orders.

Further R&D projects are being generated by Sencon to support the capabilities of the Aerosonde.

They are currently investing $11 million to support the development of a new vend and temperature

profile measuring system known as a Doppler Profiler', a new k&Xnng detection system, and the

further development of integrated computer-based forecasting systems.

The research for this project was aided by the syndication provisions of the R&D tax concession.

IR&D Board Annual Report '97-'98 30

Ch

apter 2

Conclusion

Overall, during the year, efficiency in the area of tax concession has been improved and the

planned introduction of a Bill into Parliament should simplify procedures and improve access for

business as well as improving monitoring by the IR&D Board. A preliminary analysis of R&D

syndicates indicated some problem areas and a program has been put in place to address

these. Further, the Federal Court has provided interpretation of the legislation that creates an

environment of greater certainty both for business and for the Board.

S Y N D I C A T I O N S U C C E S S S T O R I E S

The Laser-Based Smoke Detection Syndicate This project has entered a successful commercialisation period

with sales twice the size o f those projected in the first year of

market release.

The project involved the development o f a laser-based detector for

a product called VESDA (Very Early warning Smoke Detecting

Apparatus). VESDA provides a strategic component in fire protection systems where smoke or

fire damage would cause substantial loss in either capital value or revenue generation. Typical

sites include semiconductor clean rooms, computer facilities, telecommunications equipment

buildings, warehouses and heritage sites.

The laser-based VESDA uses a laser diode as its light source whereas the original VESDA

technology used xenon gas-discharge tubes that suffer from degradation and require periodic

replacement. The innovation the new product offers is its use of the laser, which lasts longer and

is more reliable. The advantage of using a laser device to replace the existing xenon flash-tube-

based detectors is its extreme sensitivity, which can alert the fire panel that a problem exists

before a fire has reached the flaming stage.

Since the R&D was completed in mid-1997 the VESDA has achieved significant sales, o f which

over 85 per cent were exports to such countries as the USA, Japan, the UK, France, Germany,

Spain, the Middle East and some countries in the Asia-Pacific region.

31 Chapter 2

Chapter 3

3 Administration of the R&D Start Program

R&D Start In 1997-98 the R&D Start program provided financial assistance to support innovation in

Australian firms. R&D Start is a competitive scheme that provides a mix of support, including

grants and loans for R&D projects. Funding was provided for up to three years’ duration for a

maximum of 50 per cent of eligible project costs. Proposals are assessed by the IR&D Board

against published criteria.

The Government significantly expanded the R&D Start program, providing an additional

$556 million over four years to bring the total expenditure to $739 million over the period July

1998 to June 2002. The new R&D Start program will now have a wider eligibility than in the

past, applying to all non-tax-exempt companies incorporated in Australia. This will allow more

firms to undertake high-risk/high-return R&D and commercialisation activities. It will ensure that

worthy projects currently excluded from the program can be supported.

Objectives

R&D Start aims to:

• increase the number of company R&D projects with high commercial potential;

• foster innovation in Australian businesses;

• encourage greater commercialisation of outcomes from R&D projects; and

• support R&D projects involving companies working together, or working with research

institutions.

The projects must involve research and development, and can also include related product

development and market research activities. Projects should have clearly identified commercial

potential, and applicants need to demonstrate that the project could not proceed satisfactorily

without R&D Start support. Applicants are required to show that they are able to fund their share

of project costs.

Program Elements In 1997-98, R&D Start provided financial assistance to firms in four different ways:

Grants for R&D projects in SMEs: these grants fund the development of internationally-

competitive products, processes or services which demonstrate significant commercial

IR&D Board Annual Report 97-98

C

hapter 3

potential. They are designed to help research projects in small to medium-sized enterprises

(SMEs). Grants are available, on a competitive basis, to support R&D projects conducted in

Australia for up to three years and cover up to 50 per cent of eligible project costs. The

grants are divided into two sections: those of $1 million and more (Large Grants), and

those of less than $1 million (Small Grants).

Grants for graduate-based R&D-related projects: grants are available, on a competitive

basis, to promote links between industry and tertiary institutions. They provide support

which enables companies to employ a graduate on an R&D-related project. Funding is

limited to $100 000 for up to 50 per cent of eligible project costs over a project life of two

years. Eighty per cent of the grant is paid to the company to cover salary and other

employment costs, and the remainder is paid to the institution for the provision of

academic support and equipment.

Grants for collaborative R&D projects: grants are awarded to encourage collaboration

between Australian companies and research institutions. Such projects might involve an

institution and a company working together to meet commercial opportunities for the

institution’s research findings. Funding is limited to $1 million for up to 50 per cent of

eligible project costs over a project life of three years.

Concessional loans: these are awarded to small companies to allow early

commercialisation of technological innovations in goods, systems or services. The

maximum loan is 50 per cent of eligible project costs. The loans are repaid over a

maximum of six years. Applicants do not pay interest for the first three years, and

thereafter pay reduced interest at 40 per cent of the Commonwealth Bank index rate. The

Commonwealth Development Bank assists the program by providing financial advice to the

IR&D Board on applications and by managing loans approved by the Board.

Review of 1 9 9 7 -9 8 A total of $149 million in grant and loan offers to 189 projects was made by the IR&D Board

under the R&D Start program in 1997-98.

Overall, it was a successful year for the program, with continued strong demand for support from

good quality projects. This was reflected in the high level of support, both in dollars and numbers

of approvals. The continuing strong demand for larger projects suggests the program is

encouraging firms to take on major projects.

During the year a new streamlined process of assessing applications was introduced. A three-

committee structure was established to handle the high workload and delegations were given to

Chapter 3

C

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the Office of Auslndustry to approve projects requesting assistance of up to $100 000.

Standard procedures for assessing applications were further developed to ensure consistency in

assessment of applications across the committees.

Grants for R&D projects in SMEs: this element consists of a combination of small grants (less

than $1 million) and large grants ($1 million and greater). There have been 243 applications for

grants and 142 were approved. The average grant was $900 000.

Grants for graduate-based R&D related projects: 11 applications requesting assistance for

graduate-based projects were considered during the year. All 11 were approved with an average

grant of $95 000.

Grants for collaborative R&D projects: 17 applications were received proposing joint projects by

industry and researchers. Of these, 10 were approved with an average grant of $820 000.

Concessional Loans: 55 loan applications for the commercialisation of the results of R&D were

considered during the year. Twenty-six were approved with an average loan of $410 000.

Outlook

The expanded and enhanced R&D Start program will have three elements:

Core Start provides assistance of up to 50 per cent of project costs for smaller Australian

companies through grants for R&D projects, and through loans for the early commercialisation of

technological innovations. Core Start will soon expand to provide assistance for these companies

to develop their capacity to undertake R&D.

Start Plus provides grants of up to 20 per cent of project costs for larger Australian companies

(those with group turnover of $50 million or more) to undertake R&D projects.

Further assistance is available for high quality projects. Start Premium offers all companies an

IR&D Board Annual Report 9 7-98

C

hapter 3

additional repayable amount which 'tops up’ either Core Start or Start Plus to a maximum of

56.25 per cent of project costs.

The IR&D Board was consulted in the drafting of the new R&D Start program, and looks forward

to the challenge of administering the expanded program.

R&D Start Committee

Introduction

The R&D Start Committee, chaired by Dr Leanna Read, was established on 20 June 1997 by the

Minister for Industry, Science and Tourism, the Hon John Moore MP. It assesses grant and loan

applications between $1 million and $3 million recommended to it by the three sectoral

committees of the Board, and it makes recommendations to the Board on applications for

funding over $3 million.

The Committee also provides input to the Board on policy matters as well as acting as a channel

for issues identified by the sectoral committees.

Activities The R&D Start Committee held three formal meetings, an extraordinary meeting and one

teleconference during the year. Dates and venues for meetings were as follows:

9 September 1997

27 November 1997

6 February 1997

15 May 1998

Canberra

Canberra (Round 3 R&D Start — Large Grants)

Canberra (extraordinary meeting)

Canberra (Round 4 R&D Start — Large Grants)

Large Grants Awarded Applications for large project grants of $1 million or more, under the new R&D Start program,

were considered in two funding rounds (Round 3 in November 1997 and Round 4 in May 1998).

A total of 16 applications for Large Grants and 3 reconsiderations were included in Round 3.

After assessment, 17 projects to the value of $42 975 025 were recommended for approval.

In Round 4, the Committee considered 18 applications. Of these, 11 were recommended for

approval and seven deferred. After seeking more information, the Committee later recommended

four of the deferred applications for approval, bringing the total value of projects in Round 4 to

$31 335 020. Three deferred projects are still under consideration.

f r b j Chapter 3

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hapter 3

Μ

TABLE 3.1: R&D START COMMITTEE LARGE GRANTS 1 9 9 7 -9 8 111

Applications Grants Value of grants

recommended recommended

for approval for approval

37 32 $ 7 4 3 1 0 0 4 5

(1) Please note that figures refer to activity within the 1997-98 financial year. Some recommendations

and approvals during the period related to applications lodged in the previous financial year.

Committee members took an active interest in the needs of companies which applied for grants

and Concessional Loans. Several members of sectoral committees and the R&D Start

Committee visited applicant companies personally in order to gain a better appreciation of the

projects proposed. Visits by committee members gave them the opportunity to advise applicant

companies at first hand of the procedures for granting loans, as well as informing them of the

way information sought by the Committee was utilised.

Biological Committee Chair: Dr Leanna Read

Introduction The Biological Committee was established by the Minister on 12 February 1997 to assist the

IR&D Board in the assessment process of the R&D Start program.

The Biological Committee is responsible for assessing R&D Start applications for funding

involving products, processes or systems with application in the health, medical scientific,

agricultural, fishing, forestry, environmental and food-processing industries.

Members of the Biological Committee have been drawn from across the broad spectrum of the

biotechnology sector and bring expert consideration to each of the assessments of R&D Start

applications, particularly in regard to their technical merit.

Table 3.2 gives details of Small Grants approved by the Committee and Table 3.3 shows

Concessional Loan approvals for the financial year. Table 3.4 shows Large Grant applications,

recommendations and approvals.

IR&D Board Annual Report 97-98

Chapter 3

TABLE 3.2: BIOLOGICAL COMMITTEE SMALL GRANTS 1 9 9 7 -9 8

Expressions

of Interest

Applications Approvals Value of grants

approved

Company based 1 24 16 8 089 142

Collaborative projects

between industry and

research institutions with

high-risk R&D

0 8 6 5 283 025

Collaborative graduate-based

projects between industry

and research institutions

0 0 0 0

TOTAL 1 32 22 $13 372 167

TABLE 3.3: BIOLOGICAL COMMITTEE CONCESSIONAL LOANS 1 9 9 7 -9 8

Applications Passed Approvals Value of Loans

to COB Approved

TOTAL 10 10 7 $2 531 882

TABLE 3.4: BIOLOGICAL COMMITTEE LARGE GRANTS 1 9 9 7 -9 8

Applications Grants recommended Value of grants

for approval recommended

for approval

29 11 $21 451 574

^ Chapter 3

C

hapter 3

Meetings

The Committee met nine times during the 1997-1998 financial year on the following dates:

25 August 1997 Canberra

2 October 1997 Canberra

16 October 1997 teleconference

12 November 1997 Canberra

16 December 1997 Canberra

10 February 1998 Canberra

8 April 1998 Canberra

4 May 1998 Canberra

9 June 1998 Melbourne

Engineering and Manufacturing Committee Chair: Mr Su-Ming Wong

Introduction

The Engineering and Manufacturing Committee was established by the Minister on 20 June

1997. This Committee replaced the Engineering Committee and the Manufacturing Committee

which had been in operation since 12 February 1997.

The Committee is responsible for assessing all applications for up to $1 million for grants for

R&D activities and loans for commercialisation of technological innovation in the sectors covered

by the following industry groups:

• resource processing;

• mining equipment;

• electricity generation and supply;

• engineering waste management; and

• recycling and monitoring.

The Committee also evaluates applications for products, equipment, processes and systems that

contribute to the production of intermediate or final manufactured products. These may include:

IR&D Board Annual Report 97-98

C

hapter 3

• transport equipment, components and products;

• textiles, clothing and footwear;

• aerospace equipment and products;

• components of manufactured goods;

• advanced materials;

• advanced manufacturing technology; and

• manufacturing systems.

The Committee recommends applications for funding of $1 million and more to the R&D Start

Committee for consideration.

Committee members are drawn from industry and academia and members have qualifications

and experience in a wide range of commercial and technical fields.

Activities of the Committee In conjunction with its formal meetings, the Committee conducted two briefing sessions on I R&D

Board programs for senior industry executives, in Melbourne on 26 March and in Brisbane on 9

June. These were well attended and provided a useful forum for interaction between the

Committee and industry.

Meetings During 1997-98 the Committee held eight formal meetings and two teleconferences. The

Committee’s formal meeting dates and places were as follows:

21 August 1997 Canberra

14 October 1997 Canberra

7 November 1997 Canberra

16 December 1997 Sydney

10 February 1998 Sydney

26 March 1998 Melbourne

5 May 1998 Canberra

9 June 1998 Brisbane

Due to the urgency of some applications, the Committee held a number of teleconferences to

accelerate consideration of proposals.

Chapter 3

C

hapter 3

Μ

Grants and Loans Awarded

The Committee considered applications for Large Grants in November 1997 and May 1998.

Applications for funding of less than $1 million and applications for Concessional Loans were

considered in meetings held every 6 -8 weeks.

In Round 3 the Committee considered 12 new Large Grant applications and reconsidered 13. Of

these, 11 were recommended for approval.

In Round 4 the Committee considered 12 new Large Grant applications and reconsidered four.

Two applications were recommended for approval, two were deferred and one was ruled

ineligible. After seeking more information, the Committee later recommended that one of the

deferred applications be approved.

Table 3.5 shows applications assessed and Large Grants awarded in 1997—98.

TABLE 3.5: ENGINEERING AND MANUFACTURING COMMITTEE LARGE GRANTS 1 9 9 7 -9 8

Applications Grants recommended Value of approvals

for approval

41 14 $33 020 672

With regard to Small Grants under $1 million, the Committee considered a total of 58

applications, nine expressions of interest and 10 variations. After assessment, 48 projects

worth $20 175 663, and all variations, were approved.

Twenty-four applications for Concessional Loans and four loan variations were considered, of

which 15 were passed to the Commonwealth Development Bank (CDB) for financial assessment.

After assessment, 10 projects worth $3 539 576, and all variations, were approved.

Table 3.6 shows Small Grant applications assessed and approved by the Committee, and Table

3.7 shows Concessional Loans for Commercialisation of Technological Innovation approved

during the year. Table 3.8 gives details of Large Grants considered by the Committee.

IR&D Board Annual Report 9 7 -9 8

Ch

apter 3

TABLE 3.6: ENGINEERING AND MANUFACTURING COMMITTEE SMALL GRANTS 1 9 9 7 -9 8

Expressions

of interest

Applications Approvals Value of grants approved

Company-based (SME) 9 54 45 18 232 397

Collaborative projects 0 4 3 1 943 266

between industry and

research institutions

with high-risk R&D

Collaborative R&D 0 0 0 0

projects involving

graduates, industry

and a tertiary or

research institution

TOTAL 9 58 48 $20 175 663

TABLE 3.7: ENGINEERING AND MANUFACTURING COMMITTEE CONCESSIONAL LOANS FOR COMMERCIALISATION OF TECHNOLOGICAL INNOVATION

Applications Passed to CDB Approvals Value of loans

approved

24 15 10 $3 539 576

TABLE 3.8: ENGINEERING AND MANUFACTURING COMMITTEE LARGE GRANTS 1 9 9 7 -9 8

Applications Grants Value of grants

recommended recommended

for approval for approval

38 14 $32 359 520

Chapter 3

C

hapter 3

Information Technology and Telecommunications Committee Chair: Dr John Bell

Introduction

The Information Technology and Telecommunications Committee was established by the Minister

on 12 February 1997.

The Committee is responsible for overseeing grant and loan applications and expressions of

interest for core hardware and software products with wide application across industry sectors

and products in the communications and broadcasting industries, including:

• computer systems (hardware and software)

• communication systems (hardware and software)

• microelectronics, optoelectronics and photonics;

• information-based technology products and processes with wide application across industry

sectors — artificial intelligence, human-computer interface technologies, integrated

software development environment and tool sensors, and computer graphics.

Small Grants Awarded in 1 9 9 7 -9 8 The Committee assessed four expressions of interest and 51 grant applications. It approved 37

projects and committed $20 138 765 in grant funds. Table 3.9 shows a breakdown of

applications assessed in 1997-98.

Table 3.10 shows figures for Concessional Loans for Commercialisation of Technological

Innovation considered by the Committee.

Table 3.11 gives details of Large Grant recommendations.

Concessional Loans Awarded in 1 9 9 7 -9 8 The Committee assessed 19 initial applications and of these, 15 applicants were invited to

proceed for further consideration. In total it supported eight projects and approved $4 546 930

in loans.

IR&D Board Annual Report 97-98

C

hapter 3

TABLE 3.9: INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS COMMITTEE SMALL GRANTS 1 9 9 7 -9 8

Expressions

of interest

Applications Approvals Value of grants

approved

Company-based (SME) 4 51 37 19 138 765

Collaborative projects

between industry and

research institutions with

high-risk R&D

0 5 1 1 0 0 0 000

Collaborative R&D projects

involving graduates, industry

and a tertiary or research

institution

0 0 0 0

TOTAL 4 56 38 $20 138 765

TABLE 3.10: INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS COMMITTEE CONCESSIONAL LOANS FOR COMMERCIALISATION OF TECHNOLOGICAL INNOVATION, 1 9 9 7 -9 8

Applications Passed to CDB Approvals Value of

loans approved

19 15 8 $4 546 930

TABLE 3.11: INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS COMMITTEE LARGE GRANTS, 1 9 9 7 -9 8

Applications Grants Value of grants

recommended for recommended for

approval approval

25 14 $30 738 232

Chapter 3

C

hapter 3

Meetings The Committee met eight times in formal meetings during 1997-98, nine times out of session

and once via teleconference. Committee meeting dates and places were as follows:

21 August 1997 Canberra

30 September 1997 Canberra

14 November 1997 Canberra

11 December 1997 Canberra

16 February 1998 Melbourne

26 March 1998 Sydney

8 May 1998 Canberra

27 May 1998 teleconference

11 June 1998 Canberra

IR&D Board Annual Report 97-98

Chapter 4

4 Administration of the innovation Investment Fund Program

Introduction

The Innovation Investment Fund (IIF) Program (originally known as the Small Business Innovation

Fund) was announced by the Prime Minister in the Small Business Statement, More Time for

Business, in March 1997. The Program’s objective is to provide access to equity (venture)

capital to assist small, new-technology companies to improve the commercialisation outcomes of

Australia's strong research and development capabilities.

The Fund Management Committee was established by Ministerial Direction on 20 June 1997 to

provide advice to the Board in relation to the IIF Program.

Innovation Investment Fund (IIF) The IIF Program aims to:

• encourage the development of small, new-technology companies commercialising research

and development, by addressing capital and management constraints;

• develop self-sustaining, early-stage, technology-based venture capital;

• develop fund managers with experience in the early-stage venture capital industry; and,

• establish in the medium term a ‘revolving’ or self-funding program.

The first five fund managers were identified in December 1997 for the first round of the IIF

program. Following the interest shown in the first round of the program, the Government has

committed a further $100 million to support a second round of IIF fund manager licences which

are expected to be announced by July 1999.

The Government also decided to apply the concept to the development of renewable energy

technologies as one of its initiatives to reduce greenhouse gas emissions.

Each Fund is expected to have a life of around 10 years. Overall administration of the IIF

Program is the responsibility of the Board and the Office of Auslndustry. Private sector fund

managers will operate under a management licence agreement and investor document

requirements (e.g. trust deed or partnership agreement) and will make all investment decisions

in relation to the fund.

Returns from the investments of the Funds will be distributed so that the Government and

private investor capital will be returned on a pro-rata basis. Government and private investors will

Chapter 4

C

hapter 4

receive a pro-rata return of 6.15 per cent. Of the remaining profit, 10 per cent will go to the

Government and the remaining 90 per cent will be shared 80:20 between the private investors

and the fund managers.

Investee’ Company Eligibility

Companies eligible for investments by the Funds include those which:

• are commercialising the results of R&D activities;

• are operating in the traded goods and services sector;

• have a majority of their employees (by number) and their assets (by value) inside Australia

at the time the licensed fund first invests in the company;

• have net tangible assets of not more than $5 million at the time the licensed fund first

invests in the company; and,

• are prepared to invest at the ‘seed’, ‘start-up’ or in the 'early expansion’ stages.

Typically, the companies would not be profitable and frequently would be cash-flow negative at

the time of initial investment.

Committee Membership Professor Peter Dodd (Chair), Dr Terry Cutler and Mr Phil Scanlan were initially appointed to the

Committee on 20 June 1997. In November 1997, the Minister accepted the offers of Professor

Dodd and Mr Scanlan to stand down from the Committee due to conflicts of interest (Professor

Dodd formally resigned from both the Board and the Committee on 29 January 1998). Dr Cutler

was appointed Acting Chair of the Committee from 17 November 1997 to 30 April 1998.

Mr Michael Dillon, Mr Trevor Boucher and Professor Terry Walter were appointed as Committee

members on 1 7 ,1 8 and 24 November, respectively. Mr Dillon (whose appointment was ex­

officio) left the Committee on 8 June 1998 and was replaced by Mr Andrew Bain, the new Head

of Division of the Office of Auslndustry. On 19 June 1998 Dr Cutler resigned as a member of the

Committee.

Round One of the IIF Program The first round of the IIF provided $130 million in Commonwealth funding which is to be matched

by $65 million private sector capital.

IR&D Board Annual Report 9 7 -9 8

Cha

pter 4

The role of the Committee

During the financial year the Fund Management Committee oversaw the development and

implementation of the IIF Program with support from the Office of Auslndustry.

The venture capital industry has shown considerable interest in the IIF Program. A total of 35

fund manager applications was received. The Committee was assisted in the assessment

process by Total Risk Management Pty Ltd and Wilshire Associates Incorporated, who provided

industry expertise and undertook due diligence investigations.

In November 1997, the Committee shortlisted 12 applicants for interview. The Committee's

recommendations were considered by the Board at its meeting of 4 December 1997. The Board

offered fund manager licences to the following applicants:

TABLE 4.1: ROUND 1 INNOVATION INVESTMENT FUND

Fund Managers Contact

A&B Investment Management Pty Ltd

(Information industries)

Dr Roger Buckeridge ph 0 2 9252 36 00

AMWIN Management Pty Ltd (General focus) Mr Michael Hilsden ph 0 2 9251 9655

Coates Myer & Co (IT&T, software, life sciences) Mr Michael Myer ph 07 3 3 6 9 9155

Momentum Funds Management Pty Ltd

(General focus)

Mr Ron Finkel ph 0 3 9 6 1 4 4211

Rothschild Bioscience Managers Ltd

(Bioscience)

Dr Geoffrey Brooke ph 0 3 92 54 4937

The five management licence agreements were signed during May and June 1998 and two of the

five fund managers finalised their trust deed by the end of June 1998. The fund managers are to

identify and invest in suitable small companies which meet the eligibility criteria for IIF

investments and assess investment proposals with a view to committing new equity to support

the companies. ‘Investee’ companies will be supported by the active involvement of the fund

managers in their business development. The Board believes that while the risks involved are

higher than for other investments, the rewards can more than compensate for the risks. It

believes that investments will usually be realised in five to eight years.

Major Achievements during the Financial Year The major achievements of the Committee over the last financial year included:

• the finalisation of the Ministerial Directions for the IIF Program;

Chapter 4

C

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• the assessment of 35 applications for fund licences;

• the completion of the IIF guidelines and the internal governing principles;

• due diligence undertaken by Total Risk Management and Wilshire Associates as part of the

Round 1 assessment of applications;

• the appointment of a probity auditor, Stephen Marks & Associates, to ensure that the

assessment process was beyond reproach;

• the identification of five potential fund managers by the IR&D Board;

• contracting expert legal and financial advice from David Briggs (Mallesons Stephen Jaques),

Michael Bannon (Duesburys) and David Gonski (Wentworth Associates). Through external

consultants the Committee was able to draw upon the best industry advice available;

• the finalisation of the management licence agreement, model trust deed and model

partnership agreement. This process included negotiations with the successful applicants,

including face-to-face interviews on 23 -24 March 1998;

• the establishment of a government-owned company as an investment vehicle for the IIF

Program. This company, IIF Investments Pty Ltd, held its first board meeting on 1 June

1998; and

• the official signing ceremony for Round One of the IIF program held on 22 May 1998. The

Minister, the FI on John Moore MP, presented certificates to those fund managers who had

signed their licence agreements.

Round 2 of the IIF Program

A second round of IIF funding was announced in the Prime Minister’s Industry Statement of

December 1997, Investing for Growth. Funding becomes available in July 1999. It is expected

that up to four fund managers will be identified.

Specialised Renewable Energy Equity Fund In its November 1997 statement, Safeguarding the Future: Australia's response to Climate

Change, the Government announced that $21 million would be made available for a Renewable

Energy Equity Fund or REEF (formerly known as the Renewable Energy Innovation Investment

Fund). Commonwealth funding is to be matched by private sector capital, with Commonwealth

funds to be provided up to $2 for every $1 raised by the private sector.

This package provides a basis for increased employment and sales in both the domestic and

IR&D Board Annual Report 9 7 -9 8

C

hapter 4

export markets and addresses impediments currently limiting investment in, and uptake of,

renewable energy technologies. In the longer term these initiatives are expected to achieve

significant reductions in greenhouse gas emissions and provide other environmental benefits for

Australia, developing countries in the Asia-Pacific region, and other nations.

REEF is being delivered by the Office of Auslndustry in conjunction with the Australian

Greenhouse Office (AGO). The program is designed to provide support for innovative companies

and joint ventures and is complemented by the Renewable Energy Commercialisation program

and the Renewable Energy Showcase program. It is intended that the REEF will be based on the

IIF model. Expressions of interest are expected to be sought in August 1998.

Payments Following completion of the trust deeds for AMWIN and A&B, Commonwealth funds were

forwarded to these companies via IIF Investments Pty Ltd to begin their investment processes.

At 30 June 1998 a total of $4 042 667 had been paid by the Commonwealth to IIF Investments

Pty Ltd. A total of $2 475 000 had been paid by IIF Investments Pty Ltd to licensed IIF Funds, of

which $1 858 091 was for investments in investee companies.

Meetings The Fund Management Committee held 16 formal meetings in the 1997-98 financial year as

follows:

17 July 1997 Sydney

8 August 1997 Sydney

7 October 1997 Canberra

24-26 November 1997 Sydney

11 December 1997 Melbourne

27 January 1998 Melbourne

11 February 1998 Melbourne

20 February 1998 Sydney

5 March 1998 Sydney

11 March 1998 Sydney

23-24 March 1998 Melbourne

2 April 1998 teleconference

22 April 1998 Sydney

14 May 1998 Melbourne

1 June 1998 teleconference

16 June 1998 teleconference

Chapter 4

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5 Communications and Strategic Development

Introduction

The Industry Research and Development Board has a responsibility to promote innovation,

research and development, and this work is being undertaken by two subcommittees of the

Board: Communications chaired by Olga Sawtell, and Strategic Development chaired by Leslie

Butterfield. That innovation, research and development are the most effective ways for firms to

compete in the global economy is acknowledged by growing evidence worldwide that knowledge­

intensive industries and highly innovative businesses employ more people, grow faster and are

more competitive. Innovation, therefore, is seen as one of the most significant creators of wealth

as we prepare to enter the new century.

The areas of innovation of particular interest to the Board are:

• technological innovation, including R&D on new products and processes, and significant

changes in existing products and processes; and

• encouragement of investment in the commercial outcomes arising from innovative

activities.

The Board has taken a proactive approach to ensuring recognition of, and publicity for,

Australia’s level of business expenditure on R&D. As well as encouraging high levels of industry

R&D, the Board promotes successful commercialisation.

During 1997-98 the Board’s administration of the 125 per cent tax concession for R&D, coupled

with the introduction of three new elements of R&D Start (Core, Plus and Premium) and the

Innovation Investment Fund, formed the essential fabric of support for industry research and

development in Australia.

The Board’s primary aim has been to provide firms with improved access and services by

increasing the efficiency and effectiveness of delivery of its innovation programs through the

Office of Auslndustry.

Strategic Planning As the primary body responsible for administering industry-based innovation programs at

the Commonwealth level, the Board has addressed longer-term issues by developing a

strategic plan.

The planning exercise had its origins in 1997, although key developments were achieved at a

IR&D Board Annual Report 97-98

Ch

apter 5

'scenario planning’ workshop held on 3 February 1998, and at the IR&D Board’s strategic

planning retreat on 21 February 1998. Major issues considered included:

• barriers to, and drivers of, innovation;

• suitable frameworks for increasing the level of innovation in Australia;

• global influences on industry innovation; and

• the dominance of science, technology and manufacturing in the current understanding of

innovation.

In developing the strategy, the Board noted that cultural factors particular to Australia had proved

just as inhibiting to enhancing the level of R&D in industry as the acknowledged financial

impediments.

The key challenges identified by the Board are found in the plan’s strategy streams:

Strategy Stream 1: the promotion of increased participation in R&D by firms currently not

benefiting from IR&D programs, including:

• focusing on relevant enterprises in all sectors;

• firms with low R&D intensity; and

• firms currently not undertaking R&D.

This challenge was to be addressed by enhancing the level of information about innovation in the

community.

Strategy Stream 2: Fostering intensified R&D activity among firms currently benefiting from IR&D

programs, including

• all firms in all sectors;

• firms currently involved in R&D; and

• firms capable of exporting.

This issue was to be addressed primarily by examining the potential for funding regimes that

would reward increases in the level of R&D.

Strategy Stream 3: Increasing R&D participation among firms in emerging growth sectors of the

Australian economy, including:

• firms within identified industry growth sectors;

• firms with high export potential; and

^ Chapter 5

C

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• firms with an unknown level of R&D.

This strategy stream was to be addressed by enhancing the Board's programs and in fostering

innovation in the identified growth segments.

The IR&D Board recognised the need for promotional and targeted strategies for firms within the

different strategy streams.

The Board has initiated a detailed examination of market growth potential and R&D activity in

the ‘key growth areas’. The Board’s investigations have also identified major deficiencies in

current data sources, and have shown a need to establish definitional standards for collecting

such information.

Risk Management Strategy During 1997-98, the Board and the Office of Auslndustry also established a comprehensive risk

management strategy for all the industry research and development support programs.

Broadleaf Capital International Pty Ltd was commissioned to help develop the strategy. The

strategy outlined processes directed at reducing risk and capturing opportunities, and the

processes and techniques to enhance the efficiency of risk management by the Board and

Auslndustry. The strategy defines a structured and continuous process facilitating the

identification and understanding of the risks faced by the Board and Auslndustry. The integrity of

this process is being supported by an active system of monitoring, reporting and reviewing.

Industry Executive Briefings Five briefings on programs administered by the IR&D Board were held in Brisbane, Sydney,

Melbourne, Adelaide and Canberra, attracting almost 500 invited participants. These included

industry leaders and business executives from a broad spectrum of industry associations,

leading companies and major consulting firms. Board members spoke at each of these briefings.

Several Board members also undertook speaking engagements to promote the Board and its

programs at other events. These included addresses to the Performance Measures for R&D

Conference and the CRC Association Conference.

Marketing

The Communications Unit within the Office of Auslndustry worked closely with the Board’s

Communications Sub-committee in increasing public awareness of the Board’s programs

and activities.

IR&D Board Annual Report 97-98

C

hapter 5

The Ray Andrews and Associates consultancy, which had been approved by the Ministerial

Committee on Government Communications, further developed R&D communications activities.

Communications Strategy

The strategy adopted in 1997-98 sought to:

• address the short-term need for immediate awareness-raising activities to increase the

number and quality of applications for R&D programs: and

• provide a framework for longer term planning and promotion of the benefits for companies

of undertaking research and development.

The major themes of the communications strategy were as follows:

• the Federal Government has a legitimate and positive role to play in promoting research

and development in Australia;

• the IR&D Board’s role is to assist and add value to government R&D-related policy making

and the drive for economic growth of businesses across Australia; and

• the IR&D Board fulfils this role by providing opportunities for businesses to research,

develop and commercialise new ideas for internationally-competitive products, processes

and services.

Key communications activities focussed on promoting the benefits of R&D through case studies,

and included arranging speaking events, producing publications, placing advertisements,

negotiating sponsorships and organising media events.

Advertising A comprehensive schedule of advertising was developed and implemented by the

Communications Unit. This included placement of advertisements or information supplements in

all major metropolitan dailies, key business magazines and specialist print media.

Information was also included in an in-flight promotional video, and in in-flight magazines.

Focus group testing of Board advertisements was undertaken before the final versions

were developed.

Case Studies Successful R&D companies were profiled in print and video case studies and promoted in the

Auslndustry Magazine.

Chapter 5

C

hapter 5

Evaluation of Communications Activities

The effectiveness of communications activities was demonstrated through a measured increase

in R&D-related calls to the Auslndustry Hotline, and through an increase in the number of initial

R&D inquiries and applications made. About 70 per cent of Hotline calls now relate to R&D.

Communications Consultancies

TABLE 5.1: COMMUNICATIONS CONSULTANTS COMMISSIONED BY THE BOARD

Consultant Cost Topic

Ray Andrews and Associates $680 0 0 0 * Communications strategy including print

advertising, media liaison, regional radio

advertising, CD-ROM and school

innovation scoping study.

Worthington Di Marzio $6 400 Stage 1 of the focus group testing of

creative materials.

Worthington Di Marzio $13 200 Stage 2 of the focus group testing of

creative materials.

*Total value of contract over two years

Hotline calls for January-June 1 9 9 8

What can Auslndustry do for me?

What is Auslndustry?

BizLink Info

R&D Info

0 200 40 0 60 0 80 0 100 0 120 0 140 0 1600

Total calls

IR&D Board Annual Report 97-98

A

ppendix A

BOARD AND COMMITTEE MEMBERSHIP MEMBERS OF THE INDUSTRY RESEARCH AND DEVELOPMENT BOARD

AND THEIR TERMS OF APPOINTMENT AS AT 30 JUNE 1998

Term of Appointment

Chairman Mr John Bertrand AM 30 October 1995

BBBBSBSSSSSBSSBSBBBBSS ί/ΠαΙΓΓΠσΠ " ' :·

Team Bertrand Pty Ltd 18 September 1 9 9 8 1 1 1

A r t in ^ P h a irm a n n U l l l l g V /l I d l l 11 I d l 1 Dr Terry Cutler 26 September 1997

Managing Director to

Ο. Ι^Ι/ΛΙ' Ο 1 Γ>Κ ι 1 4-j-J 1 Q li m o 1 Q Q R νυιΐΘΓ oi com pany r iy ι_ια JLc7 JUNG j.y y o

Members

25 June 1997 Prof Don Anderson Chairman to

Queensland Electricity Reform Unit 2 4 June 19 9 8 13’

Prof Yianni Attikiouzel 1 July 1994

Professor and Head to

28 January 1999 Departm ent o f Electrical & Electronic Engineering

university or vvesLern Husiidiia

Mr Trevor Boucher AO 3 October 1995

to

18 September 1998

Ms Leslie Butterfield Business Development Manager

Lend Lease Property Services

Mr John Cromie

2 9 January 1996

to 2 8 January 1999

3 October 1995

Managing Director

Open Software Associates Limited

Prof Peter Dodd

Dean and Director

Australian Graduate School o f Management

to

18 September 1998

25 June 1997

to

29 January 1998 “ »

University of New South Wales

Appendix A

A

ppendix A

Dr Carrie Hillyard

Managing Director

Bionetworks Pty Ltd

DrLeanna Read

Director

Child Health Research Institute Inc

M r Peter Robson

Industry Adviser

Price Waterhouse Coopers

Dr Susan Ryan AO

M rs Olga Saw tell

Executive Director

Keenfern Pty Ltd

M r Su-Ming Wong

Executive Director

Australian Mezzanine Investments Pty Ltd

M r M ichael Dillon

Executive General Manager

Office of Auslndustry

Department of Industry, Science and Tourism

M r Andrew Bain

Executive General Manager

Office of Auslndustry

3 October 1995

8BBBSB 18 September 1998

3 October 1995

18 September 1998

29 January 1996

9

29 January 19 96

to stwmmmmmMm

28 January 19 9 9 .

29 January 1996

to i S S B S S

28 January 1999

29 January 1996

to 55

28 January 1999 s

Ex-officio appointmenf-

Ex-officio appointm ent1 51

(1) The Minister for Industry, Science and Tourism approved Mr Bertrand's request for leave of

absence from his position as Chairman on 11 September 1996.

(2) Dr Cutler resigned from the Board on 19 June 1998. He was originally appointed for the

period 29 January 1996 to 28 January 1999. Dr Cutler also acted as Chairman for the

period 25 September 1996 to 24 September 1997.

(3) Professor Anderson was appointed Acting Chairman from 1 July 1998.

(4) Professor Dodd resigned from the Board on 29 January 1998. He was originally appointed

for the period 25 June 1997 to 24 June 2000.

(5) Mr Andrew Bain replaced Mr Dillon as Executive General Manager of the Office of

Auslndustry with effect from 8 June 1998.

IR&D Board Annual Report 97-98

C

ommittee Members and their Terms of Appointment as a t 3 0 June 1 9 9 8

TAX CONCESSION COMMITTEE

Term of Appointment

Chair Mr Trevor Boucher AO

Members Mr Chris Burrell - Partner

Burrell & Co

Mr Bruce Graham Managing Director

Graham Business Development Pty Ltd

Dr Syndy Hall Director

Hall-Ford Consultants Pty Ltd

Prof Elizabeth More Director

Graduate School of Management

Macquarie University

The Hon Anthony Staley Director

RAMS Mortgage Corporation Ltd

and

Chairman

Cooperative Research Centres Association

Appendix A

R

&D START COMMITTEE

Chair Dr Leanna Read Director

Child Health Research Institute Inc

Members Mr John Cromie Managing Director

Open Software Associates Limited

Dr Carrie Hillyard Managing Director

Bionetworks Pty Ltd

Mr Su-Ming Wong

Executive Director

Australian Mezzanine Investments Pty Ltd

Dr John Bell Managing Director

Anutech Pty Ltd

Prof Trevor Cole Professor o f Electrical Engineering

University of Sydney

Prof Don Anderson Chairman

Queensland Electricity Reform Unit

Term of Appointment

2 0 June 1997

to

18 September 1998

20 June 1997

18 September 19 98

20 June 1997

SEES 18 September 1998

20 June 1997

to

28 January 1999 sssssssss20 June 1997 19 June 2000 (6)

25 July 1997

to

19 June 2000

25 July 1997

to

19 June 2 0 00 < ?> = SB

(6) Dr Bell's appointment to the Committee was revoked on 30 June 1998 to enable him to

accept appointment to the IR&D Board.

(7) Prof Anderson's appointment to the Committee was revoked on 30 June 1998 to enable

him to accept appointment to the Fund Management Committee on 1 July 1998.

IR&D Board Annual Report 9 7-98

I

T&T COMMITTEE

Chair Dr John Bell Managing Director

Anutech Pty Ltd

Members Mr John Cromie Managing Director

Open Software Associates Limited

Mr Bruce Graham Managing Director

Graham Business Development Pty Ltd

Dr Michael Hirshorn Chief Executive, Marketing

Polartechnics Ltd

Mr David Merson Managing Director

Mincom Pty Ltd

BIOLOGICAL COMMITTEE

Chair DrLeanna Read Director

Child Health Research Institute Inc

Term of Appointment

2 0 June 1997

to

30 June 1998

20 June 1997

to

3 0 June 1998

20 June 1997

to 3 0 June 1998

20 June 1997

to

3 0 June 19 98

2 0 June 1997

to

3 0 June 19 98

Term of Appointment

2 0 June 1997

to

3 0 June 19 98

Members Dr Edwina Cornish Managing Director

Florigene Pty Ltd

Dr Kate Grenot Chief Operating Officer

Institute o f Respiratory Medicine

Royal Prince Alfred Hospital

Dr Carrie Hillyard Managing Director

Bionetworks Pty Ltd

Dr Tom Spurting

Chief

CSIRO Molecular Science

2 0 June 19 97

21 May 1 9 98 l8'

20 June 1997

to

30 June 19 98

25 July 1997

to

30 June 19 98

25 July 1997

to

3 0 June 1998

(8) Dr Cornish resigned from the Committee on 21 May 1998. She was originally appointed for

the period 20 June 1997 to 30 June 1998.

Appendix A

A

ppendix A

ENGINEERING AND MANUFACTURING COMMITTEE

Term of Appointment

Chair Mr Su-Ming Wong Executive Director

Australian Mezzanine Investments Pty Ltd

20 June 1997

Members Dr Deborah Kuchler Project Development Manager

Queensland Manufacturing Institute

Prof Trevor Cole Professor o f Electrical Engineering

University of Sydney

Prof Don Anderson Chairman

Queensland Electricity Reform Unit

Mr Russell Rolls Chief Executive Officer

Heat Exchangers International Limited

20 June 1997

3 0 June 1998

25 July 1997

3 0 June 1998

25 July 1997

30 June 19 98

25 July 1997

to

B B S S · 30 June 1998

IR&D Board Annual Report 97-98

:

_______________________

Appendix A

FUND MANAGEMENT COMMITTEE

Term of Appointment

Chair S S S 5 S S 5 S S 5 S

Prof Peter Dodd 2 0 June 1997

Dean and Director y g g S B B B B

Australian Graduate School of Management 29 January 1 9 9 8 l9'

A ctin g Chair

Dr Terry Cutler i 7 Nnvpmhpr 1 QQ7 _L 1 I'iUVCIliUCI _L c/OM Managing Director to

Cutler & Company Pty Ltd 3 0 April 1 9 9 8 1101

M em bers

Mr Phillip Scanlan 2 0 June 1997

ΓΤ I K __ _______ _____________ ___.________________________ tn uirecior B B S S

Tasqueforce Pty Ltd 19 June 2 0 0 0 |U>

Mr Trevor Boucher AO 18 November 1997

B B S S

18 September 1998

Ο Λ N l/" \\ m m K n r 1 Q Q 7

Prof Terry Walter iNOvemoer /

Professor o f Accounting to

1 Q li inp 9 0 00 university or oyoney _LC3 JUi IC AWUU

Mr Michael Dillon Ex-officio appointment > 121

executive heneral Manager

Office of Auslndustry

Mr Andrew Bain Ex-officio appointm ent1121

Executive General Manager

Office o f Auslndustry

(9 ) Prof Dodd resigned from the Committee on 29 January 1998. He was originally appointed

until 19 June 2000.

(10) Dr Cutter's original term of appointment as a member of the FMC was from 20 June 1997

to 28 January 1999, however he resigned from the Committee on 19 June 1998.

(11) Mr Scanlan's appointment was revoked on 30 June 1998 to enable him to accept appointment to the Information Technology and Telecommunications Committee from 1 July

1998.

(12) Mr Bain replaced Mr Dillon as ex-officio member of the Fund Management Committee on 8

June 1998.

Appendix A

A

ppendix B

Appendix B

OFFICIAL DIRECTIONS, DECLARATIONS AND APPOINTMENTS

Following are official directions, declarations and notifications of appointment

issued in 1 9 9 7 -9 8 .

IIF PROGRAM, POLICIES AND PRACTICES: DIRECTION NO. 1 OF 1997

Commonwealth of Australia Industry Research and Development Act 1 9 86

R&D S tart Program, policies and practices of the IR&D Board in relation to the

Innovation Investment Fund (IIF) Program

Direction No. 1 of 1997

I, JOHN COLINTON MOORE, M inister for Industry, Science and Tourism of the

Commonwealth o f Australia acting under subsection 20(1) of the Industry

Research and Development Act 1986, give the following direction to the

Industry Research and Development Board.

Dated 2 0 /8 /9 7 .

Minister for Industry, Science and Tourism

PART 1 - PRELIMINARY

Citation 1. This direction may be cited as the IIF program. Policies and Practices

Direction No. 1 of 1997.

Commencement 2. This direction commences on the day on which particulars of the direction

are published in the Gazette.

IR&D Board Annual Report 97-98

A

ppendix B

Interpretation

3. In this direction:

“Act" means the Industry Research and Development Act 1986.

“ Associate” of a person means a related entity o f the person.

“ Board” means the Industry Research and Development Board.

“ Board may" is permissive and not mandatory.

"Commonwealth program capital” means amounts invested in or provided

to a Licensed fund under the IIF program.

“ com m itted capital” means amounts the Commonwealth or another

person undertakes to invest in or provide to an IIF licensed fund,

conditionally or unconditionally, and

“ com m itted” has a corresponding meaning.

“ Department" means the Departm ent of Industry, Science and Tourism,

“ drawndown capital” means com m itted capital th a t has been invested in

or provided to an IIF licensed fund.

“ eligible investee company” means a company which satisfies the criteria

developed under Part 5 o f this direction.

"equity” includes any form o f debt financing tha t is approved by the Board

which does not compel the borrower or debtor to pay the interest, the

coupon or other charge in the nature of interest prior to the end of the

term o f the debt, except in the event of default.

“fund” includes a firm , body corporate, tru s t or other structure.

“ Government sourced capital” has the meaning given in clause 19.

“ include” , “ includes” and “ including” do not lim it the generality of the

words which precede them or to which they refer.

“ key personnel” in relation to a fund manager, includes individuals whose

expertise, experience or abilities are assessed in relation to the awarding

of a licence to that fund manager.

“ passive business” means a company:

(a) which is not engaged in a regular and continuous business

operation (the mere receipt of payments such as dividends, rents,

lease payments, or royalties is not considered a regular and

continuous business operation);

(b) whose employees are not carrying on the majority of day to day

operations, and the company does not provide effective control and

supervision, on a day to day basis, over persons employed under

contract; or

(c) which the Board considers is likely to pass substantially all of the

proceeds of the financing to another entity.

“ person” includes a firm , body corporate, trust or other structure.

“ private capital” means amounts invested in or provided to an IIF licensed

fund tha t are not Commonwealth program capital.

“ privately sourced capital" means amounts invested in or provided to an

IIF licensed fund tha t are not in the opinion of the Board, Government

sourced capital.

“ R&D activities” means research and development activities as defined in

s 4(1) o f the Act.

Appendix B

1 _____________ ,

"related entity” of an entity, means an entity which is related to the first

given in section 9 of the Corporations Law.

“ result" in relation to research and development activities, means a result

that is capable o f being.exploited is contemplated by the Act.

“ IIF guidelines” means the guidelines developed by the Board under Part

2 of this direction.

“ IIF licensed fund” means a fund whose manager has been granted a

licence in respect of the fund in accordance with this direction.

“ IIF program” means the innovation Investment Fund element of the R&D

S tart Program.......... —.

A reference in this direction to an Act or other instrument is a reference

to that Act or other instrument as amended or replaced from tim e to time.

A reference in this direction to the IIF guidelines, licensing agreement or

other contractual documents, or similar words is a reference to any one

or more or all of them.

Purpose 4. The purpose o f this direction is to set out policies and practices to be

followed by the Board in the performance of its functions under the Act in

administering the IIF program.

These policies and practices are designed to provide a basis for awarding

licences and theongoing oversight o f I IF licensed funds under the IIF

program.

For the purposes of this direction and in implementing the IIF program,

the Board may enter into such deeds, agreements and other documents

as it thinks fit.

Board to have regard to certain policy objectives.

5. iT h e Board m ust have regard to the following policy objectives in the

administration of the IIF program:

(a) by addressing capital and management constraints to encourage the

development of new technology companies, which are

commercialising research and development;

(b) to develop a self-sustaining Australian early stage, technology-based,

venture capital market;

(c) to establish in the medium term a "revolving" or self-funding

scheme; and :

(d) to develop fund managers with experience in the early stage venture

capital industry.

IR&D Board Annual Report 97-98

A

ppendix B

PART 2 - IIP GUIDELINES 6. The Board m ust develop guidelines for the operation of the I1F program

(including the requirements to be imposed on IIF licensed funds, their

managers or.trustees) containing:

(a) the m atters contem plated by this direction; and

(b) any other m atters the Board thinks fit.

7. Where this direction refers to m atters to be included in the IIF guidelines,

those references are to be interpreted as a statem ent of general intent,

including those m atters in the IIF guidelines, the Board may elaborate on

define or constrain term s referred to in this direction as it thinks fit in a

manner consistent with the policy objectives.

8. The Board may amend the guidelines, from tim e to tim e, as it thinks fit,

including during the currency of any licensing round and after the

applications have been received. The amended IIF guidelines apply in

respect of tha t licensing round and to those applicants not withstanding

the date on which the applications were made.

9. The Board may include such of the IIF guidelines within the licence

agreement or other contractual documents relating to an IIF licensed fund

as it thinks fit.

PART 3 - AWARD OF LICENCES FOR FUND MANAGERS

Number of licensing rounds 10. The number of licensing rounds will be determined by the Board. The

Board m ust publicise the closing dates for applications for each licensing

round.

Application fees 11. The Board m ust levy a fee to recover part or all o f the costs incurred by

the Board and the Departm ent in assessing a licence application. The

Board may refuse to consider a licence application until such fee is paid.

Consideration of applications 12. Applications invited by the Board m ust be considered by the Board as

soon as practicable.

Award of licences 13. The Board m ust consider applications by reference to the IIF guidelines.

The num ber of Licences to be awarded by the Board, if any, will

depend on:

(a) the total amount of available Commonwealth program capital

allocated by the Board in each licensing round;

Appendix B

A

ppendix B

(b) the suitability of applicants in terms of the IIF guidelines;

(c) the level o f Commonwealth program capital requested within

individual applications; and

(d) any other m atters which the Board thinks fit.

14. The Board is not obliged to award a licence because an applicant

satisfies the IIF guidelines or for any other reason.

Requirements concerning applicants 15. Subject to clause 8, the IIF guidelines are to include criteria by which the

Board will consider applications. These criteria m ust include:

(a) a demonstrated ability to access the level of privately sourced

capital requested within the application for a licence:

(b) an understanding of and experience in dealing with issues related to

Australian and international technology investments, products,

services and markets;

(c) expertise and experience in actively seeking and investigating

potential equity investment in small early stage companies;

(d) expertise and experience in developing and implementing equity

investments strategies to achieve returns by investing in small early

stage companies;

(e) expertise and experience in the development and implementation of

successful growth and recovery strategies for small early stage

companies;

(f) expertise and experience in the successful management of

investment portfolios;

(g) experience in providing financial management advice to small early

stage companies;

(h) expertise and experience in releasing returns from investments

through third party transactions such as later round financing, trade

sales and initial public offerings;

(i) experience in generating and maintaining a variety of financial data

and reports on investment funds:

(j) demonstrated good character and high ethical standards;

(k) commitment to training and developing the skills of Australian based

s ta ff in all aspects of making venture capital investments in small,

early stage companies; and

(l) demonstrated willingness to operate within the intent of the IIF

program.

IR&D Board Annual Report 97-98

A

ppendix B

16. The Board may, if it thinks fit, in respect of any one or more or all

applications from tim e to tim e:

(a) take into account experience, expertise, abilities and other matters

sim ilar or related to the criteria in the IIF guidelines when assessing

an applicant; and

(b) attribute to particular categories of experience, expertise or abilities

or other matters, or set out in the criteria, a higher level of relative

importance than other such categories or matters in considering an

application for a licence.

17. The Board m ust include in the IIF guideline details of the information to

be provided by applicants for a licence. That information m ust include:

(a) the key personnel o f the proposed fund manager including their

roles, term s of employment and responsibilities.

(b) the amount o f Commonwealth program capital required.

(c) the amount and sources of the private capital raised or proposed to

be raised; and

(d ) : a business plan tha t includes details of:

(i) the tim ing o f investments;

(ii) the level of annual fund management fees; and

(iii) the scope of the management services to be provided to the

fund for the fund management fee.

18. Without limiting clause 8, the Board may, if it thinks fit from tim e to time,

include other requirements relating to applicants and applications in the

IIF guidelines.

Government sourced capital 19. The Board m ust regard as Government sourced capital amounts invested

in or provided to an IIF licensed fund by:

(a) an entity or entities funded directly or indirectly by the

Commonwealth, a State or Territory,

(b) any person who, as the Board thinks fit, is directly or indirectly in

receipt of funding from a source or combination of sources which

are funded directly or indirectly by the Commonwealth, a State or

Territory to such an extent that it is, as the Board thinks fit,

appropriate to treat any amount invested in or provided to the fund

by that person as Government sourced capital; or

(c) but excluding any amount o f that funding that, in the opinion of the

Board, would be inappropriate to treat as Government sourced

capital.

Appendix B

A

ppendix B

PART 4 - BASIS FOR THE LICENCE AGREEMENTS

Basis for agreements 20. The Board must not enter into agreements with applicants under the IIF

program except in accordance with this Part.

Licences 21. The Board may, within the limits under clause 13, offer licences to

applicants who, as the Board thinks fit, have the highest relative merit.

22. The Board must make an offer in writing and include words to the effect

that an applicant may accept the offer by:

(a) notifying the Board in writing;

(b) demonstrating to the satisfaction of the Board that the privately

sourced capital his been committed;

(c) executing a licence agreement in a form and containing term s

acceptable to the Board and in accordance with this direction; and

(d) compiling with any other requirements of the Board as notified in the offer o f a licence (including entering into documents).

23. The Board m ust provide for the offer to lapse if acceptance does not

occur within six months o f the making of the offer.

24. If in any particular licensing round an offer of a licence is not accepted or

lapses, the Board may offer a licence to the next applicant in that licensing round that the Board considers would best achieve the

objectives of the IIF program.

Pre-licence investments 25. The Board may make provision in the IIF guidelines for the conditions to

apply for investments in or the provision of finance to eligible investee

companies made or agreed to be made following the lodgement of an

application, but prior to the execution of the licence agreement.

PART 5 - THE OPERATION OF IIF LICENSED FUNDS

Eligible investee company 26. The Board m ust make provision in the IIF guidelines, licensing agreement

or other contractual documents relating to an IIF licensed fund requiring the fund to only invest in or otherwise provide finance to eligible investee

companies. For a company to be an eligible investee company, it must satisfy all of the following:

(a) it is commercialising the results of R&D activities or will, under the

investment arrangement with the fund, be required to commercialise the results of R&D activities;

IR&D Board Annual Report 97-98

A

ppendix B

(b) at the tim e the fund first invests in or provides finance to the

company it is at the seed, start-up, or early expansion stage of its

development;

(c) it operates in the traded goods and services sector;

(d) the product or service to which the com mercialisation of the R&D

activities relates is produced with the prim ary purpose of multiple

sale to a variety o f unrelated entities;

(e) ; it has a majority of its employees (by number) and assets (by value)

inside Australia at the tim e when the fund first invests in or provides

finance to it;

(f) a t the tim e when the fund first invests in or provides finance to the

company the average annual revenue over the previous two years of

income does not exceed $ 5 4 million per year and the revenue in

either year is not in excess o f $ 5 5 million. The calculation of

revenue for a year of income m ust exclude any abnormal items; and

(g) at the tim e when the fund first invests in or provides finance to the

company, it is not related (within the meaning of section 50 of the

Corporations Law) to a company which his an average annual

revenue, over the previous two years of income, in excess of

$ 5 4 million per year.

27. Factors indicating that a company is in the seed stage of development

include:

(a) that the initial concept of its business is being formed;

(b) prototypes or concepts of the company’s products or services are

being developed;

(c) the management team is beginning to form ; and

(d) any other matters the Board thinks fit.

28. Factors indicating that a company is in the start-up stage of development

include:

(a) th a t the funds are necessary for product development, staffing,

initial marketing and other start-up costs;

(b) the management team is substantially in place;

(c) the company is setting itself up to sell its product or science

commercially; and

(d) any other m atters the Board thinks fit.

29. Factors indicating that a company is in the early expansion stage of

development include:

Appendix B

A

ppendix B

(a) that the funding is necessary to working capital to help launch the

manufacture and sale of the company’s products or services.

Typically the company is not profitable and frequently will be cash­

flow negative; and

(b) any other matters the Board thinks fit.

Excluded companies 30. The Board must make provision in the IIF guidelines, licensing agreement

or other contractual documents relating to an IIF licensed fund to exclude

companies that conduct the following business from being an eligible

investee company:

(a) re-lending or re-investing;

(b) passive businesses;

(c) real estate businesses;

(d) farm purchases; or

(e) mining operations.

31. The Board must make provision in the IIF guidelines, licence agreement

or other contractual document relating to an IIF licensed fund to require

that the fund not, without prior approval of the Board, invest in or provide

finance to companies that:

(a) are related (within the meaning of section 50 o f the Corporation

Law) to the fund manager;

(b) are related (within the meaning of section 50 of the Corporations

Law) to any entity which provides over 10 per cent of the privately

sourced capital to the fund;

(c) are controlled (within the meaning of section 294B of the

Corporation Law) by an entity providing privately sourced capital to

the fund;

(d) have a director who is or has been an associate of the fund

manager; or

(e) have any other relationship with the fund that the Board considers

inappropriate.

32. The Board may make provision in the IIF guidelines, licensing agreement

or other contractual documents relating to an IIF licensed fund to exclude

any other persons from being eligible investee companies. The Board

m ust make such exclusions on the basis of activities, corporate structure,

industry category, sources of revenue or any other generally applicable

basis.

I R&D Board Annual Report 97-98

A

ppendix B

Determination of an eligible investee company 33. Investment decisions will be made by fund managers, but fund managers

may request a determ ination by the Board as to whether a company is an

eligible investee company. If requested to do so, the Board must

determine whether or not a company is an eligible investee company.

34. The Board is not restricted in pricing conditions, qualifications or

disclaimers on a determ ination of whether or not a company is an eligible

investee company.

35. The Board may levy fees tha t do not exceed the costs incurred by itself

and the Department in making a determination under clause 33. The

Board may refuse to make or notify a determination under clause 33 until

those fees are paid by the IIF licensed fund.

Control of an eligible investee company by an IIF licensed fund 36. The Board may make provision in the IIF guidelines, licensing agreement

or other contractual documents relating to an IIF licensed fund, to limit

the level of control exerted by the fund on an eligible investee company.

In doing so the Board m ust consider:

(a) the objectives o f the IIF program;

(b) the capital generally required by companies at the early stage of

the ir development and the cost of such capital at each stage of

investment;

(c) the ability of the fund to realise a return from an investment in small

early stage companies;

(d) the ability of the fund to protect its investment in small early stage

companies;

(e) the role of the fund manager in providing advice, guidance and

influence to small early stage companies; and

(f) any other m atter the Board thinks fit.

Operation of the IIF licensed funds 37. The Board m ust include requirements to the following effect in the IIF

guidelines:

(a) the ratio o f Government sourced capital to privately sourced capital

contributed to an IIF licensed fund will not exceed 2:1;

(b) an IIF licensed fund may be a unit trust, company, or other structure

approved by the Board, a pooled development fund cannot invest in

or provide money to an IIF licensed fund;

(c) an IIF licensed fund m ust not raise monies in the form of debt, or

^ Appendix B

equity with features materially consistent with debt, with the

exception of leasing equipment or shortterm debt for the purpose of

Appendix B

maintaining the sho rtte rm liquidity of the IIF licensed fund, without

the consent of the Board;

(d) an IIF licensed fund m ust source at least 30 per cent of the private

capital from entities not associated with the fund manager. The

Board may place additional requirements in the IIF guidelines which

require an IIF licensed fund to have a diversity o f entities providing

the private capital;

(e) an IIF licensed fund m ust provide funding to eligible investee

companies only by the means of e q u ity purchase, with the exception

o f short-term loans provided for temporary measures to an eligible

investee company, in which the fund has previously invested, or to

which it has previously provided finance. Unless otherwise approved

by the Board, the equity purchased m ust be a new issue;

(f) at leastBO per cent of an IIF licensed fund committed capital must

be invested within 5 years o f the granting o f the licence, unless

otherwise approved by the Board;

(g) an IIF licensed fund m ust not invest in or provide to an eligible

investee company more than $4 ,000 ,0 00 or 10 per cent of the

fund’s committed capital, whichever is the lesser, unless the Board

agrees otherwise;

(h) transactions carried out by an IIF licensedfund in /elation to eligible

investee companies m ust be carried out an arm ’s length;

(I) an IIF licensed fund and investee company, investor, trustee, director

or manager of such a fund m ust avoid transactions where a conflict

of interest exists. Where such transactions are unavoidable, (the

parties to the transaction m ust be able to demonstrate that the

transaction was carried out on an arm 's length basis in a manner

consistent with Part 3 .2 of the Corporations Law).;The fund or the

investor m ust notify the Board of any such conflict o f interest, the

nature o f the conflict, the nature of the transaction and the term s

and conditions o f the transaction, within thirty days of entering into

such a transaction;

(i) a person who has invested in or provided amounts to an IIF licensed

fund m ust not influence or attempt to influence, the individual

investment or financing decisions of the fund manager;

(k) an IIF licensed fund m ust have an appropriate number of suitably

qualified and experienced investment managers having regard to the

size and type o f the fund;

(l) monies provided to investee company m ust be applied to advance

IR&D Board Annual Report 97-98

A

ppendix B

the company in the com mercialisation of its R&D activities via

marketing, sales, distribution, administration, production, product

development or development of a prototype; and

(m) any other requirements the Board thinks fit.

PART 6 - TIMING OF PROVISION OF CAPITAL TO IIF LICENSED FUNDS

Drawdown of capital 38. The Board m ust determ ine in the IIF guidelines, the licensing agreement

or other contractual documents relating to an IIF licensed fund, the

process by which Commonwealth program capital will be invested in or

provided to the fund. In determ ining that process, the Board must

consider the following:

(a) that Commonwealth program capital will be invested or expended

within a reasonable period by the fund;

(b) where it considers appropriate, the Board may withhold

Commonwealth program capital from being drawndown; and

(c) any other matters the Board thinks fit.

PART 7 - INFORMATION TO BE PROVIDED BY IIF LICENSED FUNDS

Reporting 39. The Board m ust make provision in the IIF guideline licensing agreement or

other contractual documents relating to an IIF licensed fund to require the

fund to provide audited reports, as specified by the Board, within three

months of the end of the fund's year of income unless otherwise

specified by the Board. Such reports m ust be audited by the

Commonwealth Auditor-General or an auditor approved by the

Commonwealth Auditor-General.

40. The Board must make provision in the IIF guidelines, licensing agreement

or other contractual documents relating to an IIF licensed fund to allow

the Board, from tim e to tim e, to request information in any format from

the fund for the purpose of:

(a) monitoring the performance of the fund, its manager and trustee;

(b) assessing the financial viability of the fund, its manager and trustee;

(c) auditing the activities of the fund, its manager and trustee;

(d) evaluating the performance of the fund, its manager and trustee

and the IIF program;

Appendix B

(e

) investigating the activities of the fund, its manager and trustee in

term s of compliance with the IIF guidelines, licensing agreement or

other contractual documents relating to the fund; and

(f) any other purpose the Board thinks fit.

Placing an IIF licensed fund under special conditions 41. The Board must make provision in the IIF guidelines, licensing agreement

or other contractual documents in relation to an IIF licensed fund to

ensure that where the Board is of the opinion that the fund or its

manager:

(a) is or may become insolvent or suffer what the Board considers to be

a substantial loss of capital;

(b) is in breach o f the IIF guidelines, any requirement imposed on it

under clause 22 or any contractual or other obligation owed to a

third party;

(c) has failed to achieve activity milestones contained within the licence

agreement or other contractual document relating to the fund; or

(d) a member of the key personnel ceases to be employed or otherwise

retained by the fund in the manner stated in the application to be

awarded a licence.

The Board may, in consultation with entities contributing private capital

(excluding the fund’s manager and associates), place additional

conditions on the operations of the fund to protect the value of the

monies invested in the fund.

42. These conditions may include, but are not limited to:

(a) replacement of a fund manager;

(b) divestment of specified investments;

(c) limitations on investments, short-term debt raising or other financing

instruments;

(d) reimbursement o f costs associated with correcting the

circumstance; or

(e) recruitment by the fund manager of additional s ta ff with appropriate

expertise, experience or abilities.

Conditions to apply to investors 43. The Board m ust make provision in the IIF guidelines, the licence

agreement or other contractual document relating to an IIF licensed fund

for the conditions to apply in the event a person who has invested in or

provided amounts to the fund breaches the IIF guidelines.

IR&D Board Annual Report 9 7-98 ^

A

ppendix B

Valuation 44. The Board m ust make provisions in the IIF guidelines for policies and

methodologies to ensure a consistent, transparent and realistic valuation

of IIF licensed fund assets. Where practicable these methodologies and

policies are to reflect which is, in the opinion of the Board, generally

accepted practice in Australia.

Other requirements 45. Nothing in this Part 7 lim its the requirements that may be imposed under

clause 22.

PART 8 - RETURN ON DRAWNDOWN CAPITAL

Distribution 46. In determining the term s on which the Commonwealth program capital is

invested in an IIF licensed fund, the Board m ust require the fund to

distribute monies upon the receipt of earnings or the realisation of

investments or other financings in the following manner:

(a) the Commonwealth has no priority as to distributions:

(b) money subscribed for units or shares in, or provided to, the fund is

returned in the proportions invested or provided; and

(c) the balance, if any, remaining is applied as follows:

(i) there is paid to each investor including the Commonwealth an

amount equal to the interest on the amount, from tim e to time,

invested in or provided to the fund by the investor calculated at

a rate equal to the ten year bond rate prevailing on the date

the offer of a licence is made by the Board and stipulated in

the offer document; and

(ii) any surplus is to be divided between the Commonwealth (as to

10%) and the other investors and the fund manager (as to

90%).

47. The Board m ust make provision in the IIF guidelines, licensing agreement

or other contractual docum ent relating to the operation of an IIF licensed

fund to allow the Board to determine the distribution of fund monies as

between the other investors and the fund manager as contemplated by

clause 46(c)(ii). In making such a determination, the Board will take into

consideration any distribution mechanism agreed between the manager

and the other investors

Appendix B

T

en-year term 48. The Board m ust make provision for an IIF licensed fund to be wound up

after ten years from the date Commonwealth program capital is first

contributed with all monies distributed in accordance with clauses 4 6 and

47, subject to an extended period to allow for the orderly and prudent

disposal of the fund assets or for other reasons the Board thinks fit.

PART 9 - FEES

Fund management fees 49. The Board must determine and make provision in the IIF guidelines,

licensing agreement or other contractual documents in relation to an IIF

licensed fund for an appropriate maximum level of fund management fees

based on the amount o f the fund’s committed capital. In determining this

and any other fees, the Board m ust have regard to:

(a) the level of resources for fund managers that the Board considers

appropriate;

(b) the scope of the management services to be provided by the fund

manager to the fund and included in the fund management fee;

(c) the interests of the investors to the fund, including the

Commonwealth;

: (d) the objectives o f the IIF program; and

(e) any other matters the Board thinks fit.

Management services 50. The Board m ust include in the IIF guidelines, licensing agreement or other

contractual documents in relation to an IIF licensed fund a requirement

that any management services provided to an investee company by the

fund manager, or an associate of the fund manager which are paid for by

the investee company are charged at no more than market rates, are

optional, and are open to provision by a third party.

PART 10 - REMOVAL OF FUND MANAGERS 51. The Board m ust make provision in the IIF guidelines, licence agreement

or other contractual document relating to the operation o f an IIF licensed

fund for the removal of the fund manager in circumstances where the

fund or its manager:

(a) is or may become insolvent or suffers what the Board considers to

be a substantial loss of capital;

(b) is in breach of the IIF guidelines, any requirement imposed on it

under clause 22 or any contractual or other obligation owed to a

third party;

IR&D Board Annual Report 97-98

A

ppendix B

(c) has failed to achieve activity milestones contained within the licence

agreement or other contractual document relating to the fund;

(d) has failed to comply with any special conditions specified by the

Board under clause 41;

(e) a member of the key personnel ceases to be employed or otherwise

retained by the fund in the manner stated in the application to be

awarded a licence;

(f) is in breach of any provision of the Act or any other law; or

(g) in any other circumstances the Board thinks fit.

PART 11 - LIQUIDATION 52. The Board m ust make provision in the IIF guidelines, licence agreement

or other contractual docum ent relating to the operation of an IIF licensed

fund for the liquidation of entire assets of the fund prior to the ten year

term referred to in clause 48, in circumstances where:

(a) the Board is required to do so in compliance with a Court order;

(b) the Board considers that the fund is or may become insolvent or

suffer what the Board considers to be a substantial loss of capital;

(c) the Board agrees with a request from the investors in the fund to

liquidate the assets of a fund; or

(d) in other circumstances the Board thinks fit.

PART 12 - TRANSFER OR WITHDRAWAL OF INVESTORS 53. The Board m ust make provision in the IIF guidelines, licence agreement

or other contractual document relating to the operation of an IIF licensed

fund for the conditions to apply upon any of the following circumstances

occurring:

(a) the withdrawal o f a person who has invested in or provided amounts

to the fund or the transfer of ownership of any part of that person is

interest in the fund;

(b) where a person (other than the Commonwealth program capital)

does not deliver com m itted capital in accordance with their

obligations to do so; and

(c) the transfer of all or part of the Commonwealth program capital.

PART 13 - EVALUATION 54. The Board must make provision in the IIF guidelines, licence agreement

or other contractual docum ent relating to the operation of an IIF licensed

fund for the fund to cooperate in the evaluation of the IIF program.

^ Appendix B

R

& D START PROGRAM (POLICIES AND PRACTICES OF THE IR&D

BOARD) DIRECTION NO. 1 OF 1 996 (AMENDMENT NO. 1 OF 1997)

Commonwealth of Australia Industry Research and Development Act 1 9 86

R&D S tart Program (policies and practices of the IR&D Board) Direction No. 1 of

1996 (Amendment No. 1 of 1997)

I, JOHN COLINTON MOORE, M inister for Industry, Science and Tourism, acting

under subsection 20 (1) of the Industry Research and Development Act 1986.

make the following instrument o f amendment.

Dated tenth June 1997.

JOHN MOORE

Minister for Industry, Science and Tourism

1. Commencement 1.1 This instrument commences on the day on which particulars o f the

instrument are published in the Gazette.

[NOTE: For the publication of particulars, see s. 20 (3) o f the Industry

Research and Development Act 1986.]

2. Amendment

2.1 The R&D Start Program (policies and practices of the IR&D Board)

Direction No. 1 of 1996 is amended as set out in this instrument.

3. Clause 3 (Interpretation)

3.1 Subclause 3 (1):

Insert the following definition:

"'research institution’ includes:

(a) the CSIRO:

(b) universities:

(c) tertiary education institutions;

(d) Cooperative Research Centres;

(e) medical research institutes;

(f) organisations that, in the opinion of the Board:

IR&D Board Annual Report 9 7-98

A

ppendix B

(i) are primarily funded by the Commonwealth or the States and have a

substantial focus on research; or

(ii) carry out research and development as their main activity;’’.

4. Clause 5 (Board to have regard to certain policy objectives)

4.1 Paragraphs 5 (b) and (c):

Omit the paragraphs, substitute:

"(b) to foster greater commercialisation of outcomes from research and

development projects;

(c) to increase the level of finance sector funding of:

(i) research and development; and

(II) commercialisation of research and development activities;

(d) to foster collaborative research and development and related

activities:

(i) within industry; and

(ii) between industry and research institutions, or both.".

5. Clause 9 (Requirements concerning projects)

5.1 Subclause 9 (1):

Omit "application:", substitute “ application, except for Graduate Based

Research and Development Related Projects in Small to Medium Sized

Enterprises:” .

5.2 Subclause 9 (2):

Omit the subclause, substitute:

“ (2) To qualify for a grant for Graduate Based Research and Development

Related Projects in Small to Medium Sized Enterprises, a project

must:

(a) involve a graduate working on a specific company-based research

and development related project or a research and development

project; and

(b) be intended to result in the formation of new and appropriate

linkages between the company and a research institution.” .

5.3 Paragraph 9 (3) (a):

Omit "body registered as an Australian research agency under section

39F of the Act;” , substitute “ research institution;’’.

6. Clause 10 (Requirements concerning applicants)

Appendix B

■

- U

- ι

6.1 Omit paragraph 10 (2) (b), substitute:

“ (b) be a research institution that is not related to the collaborating

companies.’’.

r Clause 17 (Reducti

available

•JiY·)· ^TiwFslfsK sistance if other finance becomes

7.1 Omit clause 17.

8. New Clause 23A

8.1 After clause 23, insert:

Interest on repayments

“ 23A. Interest on the balance o f a recoupable part of a grant must

be charged at a rate not more than 1.5 tim es the Bank

variable small business loan rate set out in Table F4 (Indicator

Lending Rates) published monthly in the Reserve Bank Bulletin

or a similar commercial borrowing rate index.” .

IR&D Board Annual Report 97-98

Appendix B

Commonwealth of Australia Industry Research and Development Act 1 9 86

R&D S tart Program (Payments) Direction 1997

I, JOHN COLINTON MOORE, M inister for Industry, Science and Tourism, acting

under subsection 20 (1) of the Industry Research and Development Act 1986,

give the following direction to the Industry Research and Development Board.

Dated tenth June 1997.

JOHN MOORE

M inister for Industry, Science and Tourism

Citation 1. This direction may be cited as the R&D S tart Program (Payments)

Direction 1997.

Commencement 2. This instrum ent commences on the day on which particulars of the

instrum ent are published in the Gazette.

[NOTE: For the publication of particulars, see s. 2 0 (3) of the Industry

Research and Development Act 1986.]

Interpretation 3. In this direction:

“ R&D S tart Program" has the meaning given by the R&D S tart Program

(policies and practices of the I R&D Board) Direction No. 1 of 1996.

Payments 4. The Board may authorise payments under the R&D S tart Program to be

made in:

(a) the financial year commencing 1 July 1997; and

(b) subsequent financial years for which the R&D S tart Program

receives appropriations.

Appendix B

A

ppendix B

Commonwealth of Australia Industry Research and Development Act 1 9 86

DELEGATION INSTRUMENT

I, Trevor Boucher, Chairperson of the Tax Concession Committee (the

Committee), of the Industry Research and Development Board (the Board),

acting under subsection 22A(3) of the Industry Research and Development Act

1 9 8 6 (the Act), CERTIFY that by resolution of the Committee on 11 August

1997 the Committee acting under subsection 22A(1) of the Act delegated its

powers under a provision of the Act specified in an item in the Schedule to the

persons holding or performing the duties of the offices of the Australian Public

Service specified in the item, subject to the conditions (if any) specified in the

item.

Dated this 11th day of August 1997.

Trevor Boucher

Chairperson

Tax Concession Committee

Industry Research and Development Board

(The full schedule for the delegation is obtainable from the IR&D Board Secretariat.)

Commonwealth of Australia Industry Research and Development Act 1 9 86

DELEGATION INSTRUMENT

I, Trevor Boucher, Chairperson of the Tax Concession Committee (the

Committee), of the Industry Research and Development Board (the Board),

acting under subsection 22A(3) of the Industry Research and Development Act

1 9 8 6 (the Act), CERTIFY that by resolution of the Committee on 6 November

1997 the Committee acting under subsection 22A(1) of the Act delegated its

powers under a provision of the Act specified in an item in the Schedule to the

persons holding or performing the duties of the offices of the Australian Public

Service specified in the item, subject to the conditions (if any) specified in the

item.

Dated this 6th day of November 1997.

Trevor Boucher

Chairperson

Tax Concession Committee

Industry Research and Development Board

(The full schedule for the delegation is obtainable from the IR&D Board Secretariat.)

IR&D Board Annual Report 97-98

A

ppendix B

Commonwealth of Australia Industry Research and Development Act 1 9 8 6

DELEGATION INSTRUMENT

I, Trevor Boucher, Chairperson o f the Tax Concession Committee (the

Committee) o f the Industry Research and Development Board, acting under

subsection 22A(3) of the Industry Research and Development Act 1 9 86 (the

Act), CERTIFY that by resolution o f the Committee on 10 June 1998, the

Committee acting under subsection 22A(1) of the Act:

1. revoked all delegations previously made by the Committee, and

2. delegated its powers under each provision of the Act specified in an

item in the Schedule to the persons holding or performing the duties

of the offices of the Departm ent of Industry Science and Tourism or

the Committee specified in the item, subject to the conditions (if

any) specified in the item.

Dated this 10th day of June 1 9 98

Trevor Boucher

Chairperson

Tax Concession Committee

Industry Research and Development Board

(The full schedule for the delegation is obtainable from the IR&D Board Secretariat.)

Appendix B

A

PPENDIX C

Conflict of Interest Guidelines The IR&D Board observes statutory requirements and generally applicable

standards concerning conflict o f interest matters in running its programs. The

Board sets out to address indirect and direct pecuniary interests as the Act

requires, but also intends the scope of these guidelines to cover other personal

or family interests.

The Board is conscious that perceptions of conflict of interest may be as

im portant as actual conflict. The following describes the procedures that are to

be followed, based on the Code o f Conduct adopted by the Board.

Procedures Section 16 of the Industry Research and Development Act 1 9 8 6 requires Board

members to disclose at a meeting of the Board the nature of any direct or

indirect pecuniary interest in matters considered or about to be considered by

the Board. The Act requires such disclosures to be recorded in minutes of

meetings. This process also applies to acting members (sub-section 16(4)) and

to members o f the Board's com m ittees (section 24).

The Board also has adopted a process whereby Board and Committee

members, upon appointment, prepare and lodge with the Secretary of the

Department o f Industry, Science and Tourism a disclosure statem ent of the

pecuniary and other personal interests o f themselves and o f their immediate

family of which they are aware. The contents of the statement are strictly

confidential and only accessible, if necessary, to the Secretary of the

Department. Board and Committee members are required to provide a 'Record

of Private Interests’ statem ent annually and to update that information in the

interim if there is any significant change in their private financial circumstances.

The sealed envelopes containing this information are returned to members at

the expiry of their term of office.

In addition, the Board has established formal procedures for the handling of

matters involving actual or potential conflicts of interest, which it requires all

Board and Committee members to meet. These are set out below.

A member who has issues or concerns about conflict of interest matters may

wish, prior to a relevant meeting, to discuss them with the Departmental officer

who is nominated to assist the Board in these respects.

To assist in maintaining a close focus on conflict of interest issues, an early

agenda item at each board and committee meeting should involve formal

enquiry as to the existence of any conflict.

IR&D Board Annual Report 97-98

A

ppendix C

Declaring a conflict of interest 1. Where a Board or Committee member is aware of an actual or potential

conflict of interest, pecuniary or otherwise, the member m ust advise the

m eeting prior to tha t item being discussed. Where the interests of a

member of h is/h e r im mediate family are involved, the member should

disclose those interests, to the extent they are known to them. The

member m ust then leave the room and this m ust be recorded in the

minutes.

2. The Board or Committee has an ability to decide, in the absence of the

member, that where a conflict situation exists the member concerned

may nonetheless be present during discussion o f the m atter (and take

part in the discussion) or even take part in the decision-making. The

decision on this could turn on whether the conflict is material or

immaterial (insignificant).

3. If judged an immaterial conflict, the member may be invited back in to

take pa rt in the discussions and, if appropriate, the decision-making. If

judged a material conflict, there should be no further involvement of the

member.

4. Occasion may arise where the member having the conflict has some

technical knowledge, not available elsewhere, th a t could warrant an

invitation back into the room simply to answer specific predetermined

questions in relation to the technology. This would be an exceptional

circumstance. Upon providing comments to the questions, the member

would again leave the room and take no part in the discussion or

decision-making in relation to the item.

Recording a potential conflict of interest 5. The Secretariat should endeavour to determine, with respect to a

forthcom ing meeting, whether any members are likely to declare an

interest about any matters on the draft agenda. To assist in this process,

the Secretariat will provide a copy of the m eeting agenda, along with

appropriate further identification, to all members prior to the distribution

of papers and request m em bers’ advice if they are likely to declare a

potential conflict of interest in relation to any of the items listed for

consideration. Papers relating to individual applications will not be

forwarded to members until the Secretariat receives advice that they are

unlikely to declare a potential conflict of interest in relation to the items

listed for consideration.

6. Members who intend to declare such an interest will not receive reports

or information on those items.

7. The minutes of the m eeting will record: the member declaring the

interest; the nature o f the interest; if it was judged material or immaterial

Appendix C

by the Board or Committee; and the departure of members from the

room.

8. Discussions regarding the member's interest will be deleted from the

member’s copy of the minutes, unless the Board or Committee has

decided that the member should be present during relevant discussion

and decision-making.

Matters which shall be referred to the Board for determination 9. If a committee has no quorum as a consequence of conflicts of interest

of members, then the m atter shall be referred to the Board for

determination.

10. Where the committee agrees tha t because of conflict of interest issues

the m atter is of a particularly sensitive nature, that m atter shall be

referred to the Board for determination.

Requests from applicant companies for limited distribution of papers 11. In general, a request from an applicant company that a certain member

not see the papers relating to tha t particular application is to be

accepted, provided that the Board or Committee considers that the

request is reasonable.

Determining if a conflict exists 12. When considering whether a material conflict of interest exists, members

should have regard to the following questions:

Would the average member of the public, of ordinary intelligence,

looking at the relevant facts and circumstances, think that there was

a real, sensible possibility of conflict?

With human nature being what it is, is there a danger that an

average member of the public, of ordinary intelligence, may be

swayed by this kind of personal interest rather than by duty?

IR&D Board Annual Report 97-98

A

ppendix D

TABLE D.2: STAFF SUPPORT FOR THE BOARD FROM STATE OFFICES AT 3 0 JUNE 19 98

Designation

SES Band 1

SOA

SOB

SOC

ASO Class 6

ASO Class 5

ASO Class 4

ASO Class 3

ASO Class 2

Totals

Female

2

0

14

12

1

2

0

(1) The figures for staff support at the management (SES) level overstate the actual support

devoted directly to the Board's programs.

Media Events 4 December 1997 Industry Association function, Brisbane

27 January 19 9 8 Industry Association function, Melbourne: Vision Control

presentation

23 February 19 98 Industry Association function, Perth: Crommelin

Chemicals presentation

10 March 19 98 Industry Association function, Sydney: ResMed

presentation

23 April 1998 Industry Association function, Adelaide: Minelab

presentation

22 May 19 98 Innovation Investment Fund signing of agreements

2 June 1998 Industry Association function, Canberra: CEA

Technologies presentation

12 June 1998 Coates Myer signing to IIF agreement in Brisbane

Publications R&D Tax Concession brochure (four-page overview brochure)

R&D Tax Concession brochure (12-page detailed brochure about concession)

R&D Tax Concession Information Bulletin Nos 8 -1 3

R&D Scoreboard '97

Innovation Investment Fund Fact Sheet

IR&D Board Annual Report 97-98

Media Announcements 2 October 1 9 97 Australia's R&D expenditure growing fast but not fast

enough

7 October 1 9 9 7 Private sector investment in R&D increases by 22 per

cent to $ 4 billion

27 November 1997 R&D grant to Australian company solving millennium

software bug

4 December 1997 IR&D Board announces five successful IIF managers

5 December 1997 $ 1 00 million o f new R&D announced to support medical,

manufacturing, IT and m ultimedia industries

27 January 1 9 98 Australian ‘Face Technology’ Red-hot Overseas Seller

10 March 1 9 9 8 Aussie Company Develops World-first Product

31 March 1 9 98 IR&D Board Pushes for Commercialisation Outcomes

17 April 1 9 98 Technology Showcase Applauded

23 April 19 9 8 Aussie Company Takes Up Princess Diana’s Cause

TABLE D.3: APPROPRIATIONS AND EXPENDITURE, 1 9 9 7 -9 8

Budget line item

1 9 9 6 -9 7

Expend.(S)

1 9 9 7 -9 8

Approp.($)

1 9 9 7 -9 8

Expend.($)

Large Competitive Grants

Small Competitive Grants

Concessional Loans

Advanced Manufacturing

Technology Development

Program

Discretionary

Generic

National Procurement

Development Program

National Teaching

Company Scheme

Non-grant activities

Total

17,065,000

26 698 535

8 950 227

17 350

131 581 000”

767 938

2 588 990

32 600

80 332

133 800

56 334 772

47 276 841

32 727 646

7 424 379

0

87 577

2 7 1 1 8 8

131 581 000

2 1 3 5 1

25 000

390 346

88 224 328

(a) This amount represents the total for Large Competitive Grants, Small Competitive Grants

and Concessional Loans

Appendix D

Fre

edom of Information The Industry Research and Development Board received eight requests relating

to its activities in 1 9 9 7 -9 8 .

Administrative Appeals Tribunal Applications and Court Cases

During the 1 9 9 7 -9 8 year, 27 Administrative Appeals Tribunal (AAT) matters

have ensued as a result of reviews of decisions made by the Tax Concession

Committee.

The Board has participated in one Supreme Court and a total o f three Federal

Court matters. Of the Federal Court m atters, one was an appeal initiated by the

Board from a decision of the AAT (now concluded), one is still pending, and one

resulted in a favourable decision for the Board against the applicant company.

TABLE D.6: NUMBER OF CURRENT CASES AT 30 JUNE 1 9 9 8

Supreme Court Federal Court Administrative

TABLE 0.7: NUMBER OF COMPLETED CASES DURING 1 9 9 7 -9 8

Board as applicant

Board as respondent

Federal Court Administrative

Appeals Tribunal

1 S S S S 5 S

1 8

Appendix D

_______ Γ

" j s - J

Appendix E Ε 8 β Î’ : — s i

Appendix E

R&D TAX CONCESSION SCHEME

The following Tables are correct as at 3 July 1998:

Table E .l Registrants for the R&D Tax Concession by number and claimed

R&D expenditure.

Table E.2 Registrations for the R&D Tax Concession by state, 1 9 9 4 -9 5 to

1 9 9 6 -9 7 , per cent.

Table E.3 Registrants for the R&D Tax Concession by Australian Standard

Research Classification, 1 9 8 5 -8 6 to 1 9 9 6 -9 7 , per cent.

Table E.4 Registrants for the R&D Tax Concession by Australian New Zealand

Standard Industry Classification, 1 9 8 5 -8 6 to 1 9 9 6 -9 7 , per cent.

Table E.5 Registered Research Agencies.

I R&D Board Annual Report 97-98

e>1I

T

ABLE E .l:

REGISTRANTS FOR THE R&D TAX CONCESSION BY NUMBER AND CLAIMED R&D EXPENDITURE'1 2 3 4 5 '

Year Companies Salary R&D Contributions R&D Other Core Plant Feedstock Pilot Interest Total

registered expenditure contracted to CRCsIJI contracted expenditure technology expenditure expenditure11 1 plant expenditure claimed

Smllllon to RRAs 1 Smillion to others Smlllion purchases Smillion Smillion expenditure" Incurred expenditure

Smilllon Smillion Smillion Smillion for R&D11 1 Smillion

Smillion

1985- 86 i 2,549 39.2 I 2.4 0 | 6.1 55.3 | 0.1 3.5 \ 106.7

1986- 87 1,665 246.7 31.1 0 85.7 285.7 0.0 52.9 - · - 702.0

1987- 88 2,066 378.4 76.8 0 126.9 424.2 0.4 79.2 - - 1,085.8

1988- 89 2,149 450.2 75.9 0 114.6 546.9 1.1 122.5 - - - 1,311.2

1989- 90 2,358 495.9 74.8 0 189.8 666.7 44.9 141.5 - - 1,613.6

1990- 91 2,489 608.1 73.5 0 357.2 848.4 50.1 241.2 - - - 2,178.3

1991- 92 2,809 721.6 77.8 0 441.9 1,037.2 120.0 180.9 - - - 2,579.5

1992- 93 2,905 746.0 53.8 4.5 476.3 1,226.0 47.8 241.7 - - 2,796.1

1993- 94 3,383 835.7 75.2 1.2 453.5 1,525.1 138.7 333.6 - - - 3,363.2

1994- 95 3,546 911.9 72.4 6.2 497.2 1.875.0 170.3 370.4 - - - 3,903.4

1995- 96 3,673 991.8 83.1 11.2 528.6 2,119.5 158.9 389.9 - - - 4,283.1

1996- 97» 3,588 987.8 98.7 14.0 588.2 1,914.5 67.2 442.8 44.7 17.8 15.2 4,190.8

(1) Refers to claims under Section 39J of the Industry R esearch a nd D evelopm ent A ct 1 9 8 6 (excludes syndication).

(2) Registered Research Agencies (see Table E.5 for a complete listing).

(3) Cooperative Research Centres.

(4) Before 1996-97 recorded under Other expenditure’.

(5) Figures for applicants instead of registrants, as a signifucant number of applications have not yet been processed.

L___________

Appendix E

R&D Board Annual Report 97-98

TA

BLE E.3:

REGISTRANTS FOR THE R&D TAX CONCESSION BY AUSTRALIAN STANDARD RESEARCH CLASSIFICATION, 1 9 8 5 -8 6 TO 1 9 9 6 -9 7 , PER CENT

Class Description %

O il Pure Mathematics 0.03

012 Applied Mathematics 0.28

013 Statistics 0.11

01X Other Mathematical Sciences 1.88 2.30

021 Astronomical Sciences 0.02

022 Theoretical and Condensed Matter Physics 0.01

023 Atomic Molecular Nuclear Particle and Plasma Physics 0.02

024 Acoustic and Optical Physics 0.16

02X Other Physical Sciences 0.10 0.32

U Jl O.lvj

032 Inorganic Chemistry 0.26

033 Organic Chemistry 0.42

034

03X Other Chemical Sciences 0.71 1.85

041 Geology 0.29

042 Geophysics 0.30

043 Geochemistry 4.31

o no U.UZ

045 Hydrology 0.10

046 Atmospheric Sciences 0.08

04X Other Earth Sciences 0.10 5.20

051 Information Systems and Technologies 1.37

052 Computer Hardware 0.68

053 Computer Software 13.84

054 Communication Technologies 1.23

05X 1 QO 1 Q ns

061 Aerospace Technologies and Engineering 0.80

062

063

Manufacturing and Process Technologies and Engineering

Industrial Biotechnology and Food Sciences 4.12

064 Material Sciences and Technologies 8.92

06X 1.02 25.07

071 Mechanical and Industrial Engineering 5.93

VIZ U.sjf

073 6.30

074 Civil Engineering 1.62

075 Electrical and Electronic Engineering q on

07X Other General Engineering 10.91 34.39

Appendix E

T

ABLE E.3: (continued)

Class Description

081 Biochemistry

082 Genetics. Molecular Biology and Biotechnology

083 Microbiology

084 Botany

085 Zoology

086 Ecology

08X Other Biological Sciences

090 Agriculture (pre-1994-95 applications only)

091 Soil and Water Sciences

092 Crop and Pasture Production

093 Horticulture

094 Animal Production

095 Veterinary Sciences

096 Forestry Sciences

0 9 7 Fisheries Sciences

09X Other Agricultural Sciences

101 Immunology

102 Medical Biochemistry and Clinical Chemistry

103 Medical Microbiology

104 Pharmacology

105 Physiology

106 Neurosciences

107 Clinical Sciences

108 Public Health Research

109 Health Services Research

10X Other Medical and Health Sciences

110 Other Non-Manufacturing

111 Accounting and Finance

117 Anthropology

11D Education

Other not specified

% Totals %

0.11

0.25

0.16

0.04

0.01

0.06

0.06 0.71

1.88

0.22

0.38

0.27

0.17

0.16

1.14

0.21

0.31 4.75

0.06

0.07

0.02

0.14

0.08

0.02

0.10

0.04

0.08

0.48 1.08

4.31 4.31

0.00

0.00

0.00 0.01

0.48 0.48

IR&D Board Annual Report 97-98

A

ppendix E

TABLE E.4:

REGISTRANTS FOR THE R&D TAX CONCESSION BY AUSTRALIAN NEW ZEALAND STANDARD INDUSTRY CLASSIFICATION, 1 9 8 5 -8 6 TO 1 9 9 6 -9 7 , PER CENT

Class % Totals %

oox Agriculture 0.96

010 Agriculture 1.26

020 Ω 41 2 R3

030 Forestry and Logging 0.19 0.19

040 Commercial fishing 0.32 0.32

10X Mining 1.40

110 Coal Mining 1.96

120 Oil and Gas Extraction 0.86

130 Metal Ore Mining 1.41

140 1 n r

150 Services to Mining 1.68

Z±1 U.U/

212 Dairy Product Manufacturing 0.55

213 Fruit and Vegetable Processing 0.31

214 n n r U.UU

215 Flour Mill and Cereal Food Manufacturing 0.33

216 Bakery Product Manufacturing 0.25

217 Other Food Manufacturing 1.69

218 Beverage and Malt Manufacturing 0.54

219 0 12

21X Food, Beverage and Tobacco Manufacturing 1.14 5.55

221 Textile, Fibre, Yarn and Woven Fabric Manufacturing 0.30

222 0 39

223 Knitting Mills 0.01

224 0 05

225 Footwear Manufacturing 0.03

226 Leather and Leather Product Manufacturing 0.22

22X Textile, Clothing, Footwear and Leather Manufacturing 0.34 1.34

231 Log Sawmilling and Timber Dressing 0.11

ooo 0 37 ZoZ 233 Paper and Paper Product Manufacturing 0.32

23A Wood, Wood Products and Furniture (231+232+292) 0.53

238 0.33

23X Wood and Paper Product Manufacturing 0.03 1.68

0/11 n 241 242 Publishing 0.13

243 Recorded Media Manufactunng and Publishing

^ Appendix E

T

ABLE E.4: (continued)

Class Industry Type % Totals %

251 Petroleum Refining 0.34

252 Petroleum and Coal Product Manufcturing n.e.c. 0.27

9S3 n r i

254 Other Chemical Product Manufacturing 3.26

255 Rubber Product Manufacturing 0.40

256 Plastic Product Manufacturing 1.48

25X Petroleum, Coal, Chemical and Associated Product Manufacturing 1.31 7.66

261 Glass and Glass Product Manufacturing 0.19

262 Ceramic Product Manufacturing 0.22

263 Cement, Lime, Plaster and Concrete Product Manufacturing 0.70

264 Non-Metal lie Mineral Product Manufacturing n.e.c.

26X Non-Metallic Mineral Product Manufacturing 0.32 2.17

971 0 73

272 Basic Non-Ferrous Metal Manufacturing 0.50

273 Non-Ferrous Basic Metal Product Manufacturing 0.47

274 Structural Metal Product Manufacturing

275 Sheet Metal Product Manufacturing 0.50

276 Fabricated Metal Product Manufacturing 3.84

27A Basic Metal Product (271-273) 0.50

27X Metal Product Manufacturing 0.07 9.06

z o l Motor Vehicle and Part Manufacturing 1.94

282 Other Transport Equipment Manufacturing 1.40

283 Photographic and Scientific Equipment Manufacturing 1.64

284 Electronic Equipment Manufacturing 5.82

285 Electrical Equipment and Appliance Manufacturing 3.90

286 Industrial Machinery and Equipment Manufacturing 7.42

28A Transport Equipment (281+282) 0.60

28X Machinery and Equipment Manufacturing 0.03 22.73

291 n 1 n U.1J

292 Furniture Manufacturing 0.42

294 Other Manufacturing 10.49 11.10

360 0 26

370 Water Supply, Sewerage and Drainage Services 0.24 0.50

40X Construction 1.04

410 General Construction 0.56

420 Construction Trade Services 0.31 1.90

IR&D Board Annual Report 97-98

TA

BLE E.4: (continued)

Class Industry Type % Totals %

450 Basic Material Wholesaling 0.27

460

470 Personal and Household Good Wholesaling 0 17 0 49

49A Wholesale and Retail Trade 1.00

50X S B H H ^ ^ ^ B 5 5 5 5 5 S S S 5 B H S 5 S 5 B 5 S B S H H H H 0.02

510 Food Retailing 0.04

520 Personal and Household Good Retailing 0.04

530 0 06 1 15

570 Accommodation, Cafes and Restaurants 0.01 0.01

Transport and Storage ouu u .y i U.81

710 Communication Services 2.55 2.55

730 1.48

740 Insurance 0.12

750 Services to Finance and Insurance 0.91 2.51

77X ΑΛ ΛΓ\ 11.4U 11.4U

810 Government Administration 0.04

820 Defence 0.13 0.17

840 Education 0.06 0.06

860 Health and Community Services 1.26 1.26

910 Cultural and Recreational Services 0.04 0.04

920 Libraries, Museums and the Arts 0.00 0.00

930 Sport and Recreational Services 0.16 0.16

qsd Ω 66 0 65

99A Other Non-Manufacturing 2.62 2.62

Note: n.e.c. means not elsewhere classified

φ Appendix E

A

ppendix E

Registered Research Agencies An im portant aspect of the Government's commitment to R&D is facilitating

access by small and medium-sized companies to expert R&D services,

particularly those residing in the public sector research organisations.

The Industry Research and Development Act 1 9 8 6 provides for the

establishment of registered research agencies (RRAs). An RRA is an

organisation approved by the Industry Research and Development Board as

being capable of undertaking contract R&D for multiple clients. Through the RRA

Program these companies, which are often unable to claim the tax concession

because of the minimum R&D expenditure threshold of $20 0 0 0 in a year of

income, are able to take advantage of the concession by contracting work to an

organisation with RRA status.

The Board reviews the scientific and technical expertise of the organisation and

registers it in one or more classes of R&D activity. It is in these classes of

activity that the RRA can perform contract R&D work.

Contracting eligible R&D work to an RRA has the following advantages:

• All contracted expenditure is eligible for the full 125 per cent incentive

and is not subject to the expenditure threshold;

• Claims may be made for advance payments up to 12 months prior to

work actually being undertaken;

• Small and medium-sized firm s are able to undertake R&D programs

without having to invest in costly R&D equipment and expertise.

The R&D Tax Concession Branch maintains an up-to-date register o f all RRAs

and their registered classes of activity, and is able to assist applicants for RRA

status and firm s looking for potential contractors with specific R&D expertise.

Inquiries regarding the Registered Research Agency Program should be

directed to:

Registered Research Agency Program R&D Tax Concession Branch

Office o f Auslndustry

GPO Box 2704

CANBERRA ACT 2601

Telephone 02 62 1 3 7411

Facsimile 02 6213 7663

IR&D Board Annual Report 97-98 ^ [ j j }

T

ABLE E.5:

REGISTERED RESEARCH AGENCIES

Name

ACADEMY OF GRAIN TECHNOLOGY (AGT)

ACIRL LTD

ADMIRAL COMPUTING (AUSTRALIA) PTY LTD

AGRICULTURAL BUSINESS RESEARCH

INSTITUTE

AGRISEARCH SERVICES PTY LTD

AGRICULTURE VICTORIA SERVICES PTY LTD

AMDEL LIMITED

AMSKAN LTD

Mi! i t 93 09X

52 53 61

72 74 07X

96 09X 104

73 07X 09X

74 75

Appendix E

R&D Board Annual Report 97-98

3

43 Royal Parade PARKVILLE VIC 3052 ... i n _

BIO PROCESS LABORATORIES PTY LTD

BIOTECH AUSTRALIA PTY LTD

BIOTECH INTERNATIONAL LTD

BOND UNIVERSITY

BRI AUSTRALIA LIMITED

BRODIE-HALL MINING RESEARCH & CONSULTANCY CENTRE

8 2 104 BIOMOLECULAR RESEARCH INSTITUTE LTD

107

07X

BRYCE BUSINESS SYSTEMS PTY LTD

OI.X GAMBIA

r ________________________1

Appendix E

T

ABLE E.5: (continued)

Name

FYSHWICK ACT 2609 Mr D Gaul 06 280 7932

CEA RESEARCH AND DEVELOPMENT ΡΤΎ LTD

ΜΗΝ CENTRAL QUEENSLAND UNIVERSITY ROCKHAMPTON MC QLD 4072 Mrs J Coe 079 369 828

CENTRE FOR DIGESTIVE DISEASES

;Κ NSW 2046

O M 7 1 3 4 0 U

CENTRE FOR EYE RESEARCH AUSTRALIA LTD (CERA) IELBOURNE VIC 3002

CENTRE FOR FOREST TREE TECHNOLOGY (CFTT)

CENTRE FOR PRECISION TECHNOLOGY

s s r ----------t i l

VIC 3174

CERAMIC FUEL CELLS LTD

CERTS INTERNATIONAL ΡΤΎ LTD

------------

...

I II X 106 108

K1 < 105

D6X

DUX

D7X

CHEMISTRY CENTRE (WA)

ill Λ 07X 93 09X

109

07X

62 104

54 73

09X

63 109

61 74 108

Appendix E

T

ABLE E.5: (continued)

GPO Box U1987 CURTIN CONSULTANCY SERVICES PERTH WA 6845 Dr L Wadley

08 9266 3300

CURTIN UNIVERSITY OF TECHNOLOGY

DEAKIN UNIVERSITY FACULTY OF SCIENCE AND TECHNOLOGY

------------------------ -— - —

DEFENCE SCIENCE AND TECHNOLOGY ORGANISATION jria Terrace

ACT 2601

—---------------------------------—

DEPARTMENT OF ADMINISTRATIVE AND INFORMATION SERVICES

DEPARTMENT OF CONSERVATION & LAND MANAGEMENT

DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENT EAST MELBOURNE VIC 3002

Dr G Riffkin 03 9651 7200

GPO Box 46 DEPARTMENT OF PRIMARY INDUSTRIES BRISBANE Dr B Duffle 07 3239 3

Name

OOX

l)( IX

0 9X 1 0 1 102 104

07X

oox 10.1 lO:

01X

0 4X

01Λ

104 10.1 104

07X

oox

34 61 74 94 105

04X 64 82

107

""si 53 74 86 105

34 64

03X 62 75 95

107

51 06X 86

109

34 54 75 08X 10X

51 06X

D

EPARTMENT OF PRIMARY INDUSTRY AND FISHERIES

DEPARTMENT OF PRIMARY INDUSTRY AND FISHERIES, TASMANIA

DSTC PTY LTD

■ -----------------------------

DYNAMIC TECHNOLOGY PTY LTD

EDITH COWAN UNIVERSITY

r „ _ ,

9273 8136

ELECTRO OPTIC SYSTEMS PTY LTD

ERA ENVIRONMENTAL SERVICES PTY LTD

FISHERIES DEPARTMENT of WESTERN AUSTRALIA

DEPARTMENT OF PRIMARY INDUSTRY

10X

54 62 06X 75

54 63

86 09X

108 109

54 64 06X

|).1\

34 53 07X 81

06X 102

75

105

09X

Appendix E

1

Fleet S treet FREMANTLE MARITIME CENTRE

" l|ll||||[l|||| D 4214

« 7 7 - ..... GARVAN INSTITUTE OF MEDICAL RESEARCH

GENESEARCH PTY LTD

fflHHllliIniQLD 4111; *

GRIFFITH UNIVERSITY

....---------------- HEART RESEARCH INSTITUTE LTD CAMPERDOWN NSW 2050 Dr R Stocker 02 9550 3560

HERMAN RESEARCH PTY LTD

677 Springvale Road MULGRAVE VIC 3170 Mr G E Pleasance

PO Box 73 HUNTER REGIONAL MAIL CENTRE NSW 2310 Mr J Orr 049 680 044

HLA-ENVIROSCIENCES PTY LTD

HRL TECHNOLOGY PTY LTD 677 Springvale Road

MULGRAVE VIC 3170 Mr G E Pleasance 03 9565 9888

HYDROMET OPERATIONS LTD

MARRICKVILLE NSW 2204 Dr L D Jayaweera 02 9517 1188

33 34 03X

54 05X 61

73 75 07X

105 107 109

105

43 64 71

86 94 96

43 46 53

73 07X 81

86 09X 104

T

ABLE E.5: (continued)

Name

HYDROMETALLURGY RESEARCH LABORATORIES

--------------- ILLAWARRA TECHNOLOGY CORPORATION LTD

INLAND FISHERIES COMMISSION

INSEARCH LTD

INTEC ΡΤΎ LTD

INSTITUTE OF DRUG TECHNOLOGY AUSTRALIA LTD

INSTITUTE OF RESPIRATORY MEDICINE LTD

INVETECH OPERATIONS PTY LTD

VIC 3149

Ms N Sharman 03 9265 8888

A

ppendix E

5 co oo o

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Appendix E

6

1

07X

107

41 54

07X 91 10X

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Appendix

I I I I I I I I I I I I ! I I I I Μ I I I I ! i I ! 1 1

53 54

75 07X

105 107

96 09X

64 06X

24 31

45 46

63 64

07X 81

92 94

107 108

Appendix E

R&D Board Annual Report 97-98

ή

Appendix E

L

ocked Bag 21 ORANGE NSW 2800 Mr G Denney 02 63913219

PO Box 21 NSW FISHERIES CRONULLA NSW 2230

PARKS & WILDLIFE COMMISSION OF THE NORTHERN TERRITORY

PARKS AND WILDLIFE SERVICE

POLYTECH TECHNICAL SERVICES PTY LTD

----------- — — --------- —

PRINCE OF WALES MEDICAL RESEARCH INSTITUTE NSW 2<

PROGEN INDUSTRIES PTY LTD

■------------------

QUALITY WHEAT CRC LIMITED

QUEENSLAND MANUFACTURING INSTITUTE

IS QLD 4113

m s s m

NSW AGRICULTURE

U>\ 104

06X 07X

85 86 08X

97 09X

63 06X 71 75

06X 82 104 106

L_____________ J

07X

107

105

108

07X 94

10X

109

07X

Appendix E

R&D Board Annual Report

Appendix E

53 54

72 73

102 104

07X 101

33 34

46 04X

64 06X

82 83

93 94

103 104

06X 71

73 75

73 75

74 75

Appendix E

IR

&D Board Annual Report 97-98

S

UGAR RESEARCH INSTITUTE

SUSTAINABLE TECHNOLOGIES AUSTRALIA LIMITED

SWINBURNE UNIVERSITY OF TECHNOLOGY

TAYWOOD ENGINEERING LTD

TC TECHNOLOGIES PTY LTD

TECHNOLOGICAL CHOICE PTY LTD

TECHSEARCH INCORPORATED

THE AUSTIN RESEARCH INSTITUTE

THE AUSTRALIAN NATIONAL UNIVERSITY

33 34 51

64 06X 71

83 86 92

64 06X 71

24 02X 31

51 52 53

64 06X 71

81 82 83

101 102 104

74 92

34 03X 41

62 63 64

75 07X 82

107

33 34 03X

53 54 61

72 73 74

92 93 94

107 109 10X

L____________ J

Appendix E

Appendix

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IR&D Board Annual Report 97-98

08 8349 5001

71

72

71 72

08X 91

52 53

71 72

94 96

51 52

06X 71

93 94

62 64

82 86

43 51

06X 71

42 43

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96 97

10X

34 42

62 64

07X 81

101 105

03X 41

05X 61

74 75

09X 102

R&D Board Annual Report 97-98

Ί

1

Appendix E

R&D Board Annual Report 97-98

! gTOtt M WNHmM [ \

I

Appendix E

_ -------- ----

TABLE E.8: SYNDICATE MONITORING STATISTICS 1 9 9 7 -9 8

Number of Syndicates Ongoing Monitoring Activity Syndicates Under Review

Total active syndicates 205 Phone contact to gain

Information outside of visits

33 i Under further investigation 28

TRC visit

Site visit

88

21

Overdue reports

Review of a random sample

of files

5

Total Syndicates Monitored 155

Note: Auslndustry and the Tax Concession Committee have an on-going responsibility to

administer the tax concession for syndicates until the last syndicate expires in

20 08-2009. While some syndicates have been subject to one or more of these monitoring

activities, over 75 per cent of the 205 operational syndicates have had some form of

monitoring coverage this year. This table highlights that 86 per cent of operational

syndicates are compliant with their reporting requirements.

As part of the on-going monitoring process, those syndicates that are considered at high

risk or where concerns have been raised are prioritised for detailed review and may be

subject to a formal investigation. There are currently 28 syndicates under further review.

This includes desktop audits of syndicate files, technical and financial audits, independent

assessments of syndicate operations, and referral to the Australian Taxation Office for

further investigation.

Appendix E

T

ABLE F.4: CONCESSIONAL LOANS APPLICATIONS FOR FINANCE SIGNED, 1 9 9 7 -9 8

Company Activity

Maximum loan provided ($) comp

31/12/98

31/01/98

28/02/98

30/09/98

24/04/00

31/08/99

31/03/98

30/06/98

30/06/99

30/06/99

10/11/99

30/09/98

30/06/99

30/03/99

31/12/98

30/06/00

24/07/00

30/06/98

31/12/98

30/06/00

28/02/99

30/06/99

1/06/98

Γ ™

A I Scientific Pty Ltd

ABF Filters Pty Ltd

Aqualogik Pty Ltd

Avantech Pty Ltd

Bioact Corporation Pty Ltd

CorProfIT Systems Pty Ltd

Dante Nominees Fly Ltd

Dynamic Data Systems Pty Ltd

Extraordinary Technology (HiFi) Fly Ltd

Freshkept Technology Fly Ltd

Gerontic and General Products Pty Ltd

InfoTec Communications Fly Ltd

ITL Corporation Fly Ltd

Marco Engineering Industries Fly Ltd

MIG Engineering Pty Ltd

Millicer Aircraft Industries Pty Ltd

Pine Ridge Holdings Pty Ltd

Redan Developments Pty Ltd

Ro-Tree Corporation Australia Fly Ltd

Technological Choice Pty Ltd

Transport Computer Solutions Pty Ltd

Vehicle Early Warning Systems Fly Ltd

Westernport Coolstores Fly Ltd

Total

Pathfinder automated specimen & tube management system

Self-cleaning liquid filtration system

Aquatainer commercialisation project

Sign Masta 610

Commercialisation of "BIOACT" a bionematicide

KnowRisk

Advanced ceramic composites

Certification of mobile transaction device

High-fidelity amplifier system

Food stabilisation technology

“ LIFT CARE" nursing bed

Info number expansion project

Needle protectors for the prevention of needlestick injury

Ergotrend systems

Easy Eave roofing product ' " " "

Millicer Shrike light aircraft

Gray surgical retractors

Up & Running software

Spot cultivator for forestry site preparation

Weed detection and eradication equipment

Automated Tiger

EV-ALERT

Fresh coated apples

680 000

164 875

125 625

70 000

400 000

453 552

113 086

287 000

229 000

300 093

275 000

137 787

659 000

150 000

151 301

1 000 000

350 000

275 000

273 300

871 591

768 000

276 592

189 164

8 199 966

Appendix F

A

ppendix F

TABLE F.5: CONCESSIONAL LOAN APPLICATIONS FOR FINANCE SIGNED BY STATE, 1 9 9 7 -9 8

State

Victoria

New South Wales

South Australia

Western Australia

Queensland

Australian Capital Territory

Tasmania

Total

Loan

commitment

( $ )

2 327 849

2 092 177

631 174

1 221 591

844 875

809 000

273 300

8 199 966

Note: No applications for finance were signed for the Northern Territory

IR&D Board Annual Report '97-'98

Appendix G

Appendix G

COMPETITIVE GRANTS PROGRAM

TABLE G .l: SMALL COMPETITIVE GRANT APPLICATIONS, 1 9 9 7 -9 8

Applications Status Number

----------------------------------------------------------------------------- ■ — ■ ----- ------- —

Workload Outstanding at end o f previous year 25

Received during year 169

194

Processed Approved

Declined

Withdrawn

Outstanding at end of 30 June 1998

TABLE G.2: SMALL COMPETITIVE GRANT APPLICATIONS RECEIVED BY STATE, 1 9 9 7 -9 8

State

Victoria

New South Wales

Queensland

South Australia

Western Australia

Tasmania

Australian Capital Territory

Total

Note: There were no applications from the Northern Territory

j j j j y Appendix G

T

ABLE G.3: SMALL COMPETITIVE GRANT EXPRESSIONS OF INTEREST, 1 9 9 7 -9 8

Application

Workload

Processed

Status

Outstanding at end of previous year

Received during year

Agreed to proceed to application

Approved

Declined

Withdrawn

Outstanding at 3 0 June 1998

TABLE G.4: SMALL COMPETITIVE GRANTS EXPRESSIONS OF INTEREST RECEIVED BY STATE, 1 9 9 7 -9 8

State

Victoria

Queensland

New South Wales

Australian Capital Territory

Western Australia

Total

s

No expressions of interest were received from the Northern Territory, South Australia or Tasmania ....................

IR&D Board Annual Report '97-'98

©

A

pplicant

ADTEC International Pty Ltd

APCS Pty Ltd

Acacia Research Pty Ltd

Access Dinghy Sailing Systems Pty Ltd

Acoustic Technologies Pty Ltd

Advanced Systems Integration Pty Ltd

Atlantek Microsystems Pty Ltd

Atmospheric Radar Systems Pty Ltd

Auspace Ltd

Australian Aquatic Technology Pty Ltd

Avalon Systems Pty Ltd

Aviation Data Systems (Australia) Pty Ltd

Bandell Pty Ltd

Berty Technologies Pty Ltd

Biron International Ltd

TABLE G.5: SMALL COMPETITIVE GRANT AGREEMENTS SIGNED, 1 9 9 7 -9 8

R&D activity

Advanced audioconferencing facility if, iTn ■ ■ ■ 4il H ill

Microprocessor-based "universal" signal conditioner

Electronic video tracker module

: - -- ? I Lightweight, stable sailing dinghy for the

Low-cost digital signal pi an underwater acoustic

hardware to simulate 183 700

environment Q i i i i

High-speed image analysis, machine vision

noncontact inspection product

1ΙΙΙΙΙΙΙΙΙΙΙΙΙΙ··Î™Î™·Î™Î™Î™Î™·

Development i^a n e n te q ^ ^ proems modeiiing

system and matenals distribution system

mill i

|H||| 1

TilWBlHHHHIHHwH Design of both hardware and

2 Γ "

I I H I I lilllla

AVPAC definition for the manufacture of portable aircraft

and ground systems test equipment

Development of electronically activated

surgical operating table

Development of generic application technology that is both

hardware- and communication network-independent in the

area of operational remote or mobile computing

Created nuclei for cultured pearls (insertion beads)

Maximum Grant provided

( $ i

85 250

101 550

128 900

58 500

of the atmospheric radar

Small satellite communications system

Selfcleaning tanks and filtration system for

intensive high-density continuous fish production

Direction finding sub-system for determining the angle of

bearing of radaremitting pulsed microwave frequency signals

Development of core technology to comply with the new

l y i i i i

Intended date of completion

30 /0 6 /9 8

30 /0 6 /9 9

5 /0 2 /9 9

30 /09/9 8

28 /02/9 9

444 200

468 100

100 000

750 000

176 950

295 885

182 750

242 500

366 000

313 050

31 /12/9 9

3142/99 6/0 7/20 00

lllSSsBBeal iiiiL jhi w 31/03/2000 31/07/2000

31 /03/9 9

31 /08/9 9

28 /02/9 9

III 1 /0 5/98

1/04/2000

Collaborating partner

University of Adelaide

L

Appendix G

IR&D Board Annual Report '97-'9i

©

Applicant

Bizpac (Australia) Pty Ltd

Bosspak Pty Ltd

Botanical Resources Australia Pty Ltd

Brake Technologies Pty Ltd

Buderim Ginger Ltd

Burra Foods Australia Pty Ltd

CHK Engineering Pty Ltd

CICS Automation Pty Ltd

CSIRO Division of Food Science & Technology

CSlRO Division of Telecommunications and Industrial Physics

CSIRO Division of Wool Technology

CSIRO Molecular Science

CTAM Pty Ltd

TABLE G.5: (continued)

R&D activity

Automated neonatal blood spot punch and

distribution system

High speed tablet handling machine

Carbon dioxide refinery for Pyrethrum

A solid rotor oil immersed brake for the Hummer

military vehicle

Enzyme manufacturing process and stabilised enzyme for

use in tenderising tough meat

Development of milk cake, whey cheese, diet cream

cheese and bovine immunoglobulin as ingredients for the

Japanese food industry

1. MFI (Multi-Circuit Fault Indicator)

2. RPS (Remote POWERmonic Sensor

Improvements to programmable logic controllers

Treatment for whey-isolation of a number of valuable

whey protein products

New surface coatings for tools and dies enabling

increased life and more accurate product

Drug to treat diabetes

Encryption product to secure voice, data and video

information transmitted over very high-speed data communication networks

Maximum Grant provided

__ 121 600

150 400

75 000

600 000

457 700

750 000

360 650

179 800

615 000

677 550

995 000

368 800

239 500

Intended date of completion

3 1 /0 8 /9 8

26 /0 4 /9 9

31 /1 2 /9 8

3 1 /0 8 /9 8

20 /09/9 9

3 0 /0 6 /9 9

3 1 /1 2 /9 8 ­

30 /06/9 9

30/06/2000

Collaborating partner

Murray Goulburn Cooperative Co Ltd

Ford Motor Co of Australia Ltd Sutton Tools Pty Ltd

Swinburne University of Technology

Packer Associated Tanners Pty Ltd

G H Michell & Sons (Aust) Pty Ltd

Australian Leather Holdings Limited

Walfertan Processors Pty Ltd

Biota Diabetes Research Pty Ltd

C

entral Queensland Mining Supplies Pty Ltd

Circadian Technologies Ltd

Colin Austin R&D Pty Ltd

Compri Technic Pty Ltd

DJH Developments Pty Ltd

Dadanco Pty Ltd

Davies Craig Pty Ltd

Diamond Composite Pty Ltd

Digital Studio Processing Pty Ltd

Dindima Group Pty Ltd

EDL Australia Pty Ltd

Ecosol Pty Ltd

EduArt Multimedia Pty Ltd

Energy Controls Pty Ltd

Equigen Consulting Pty Ltd

Feature Press Library of Australia Pty Ltd

Fractal Graphics Pty Ltd

Futuretech Electronics Pty Ltd

The Australian National University

Anutech Pty Ltd

University of Tasmania at

Launceston

R&D Board Annual Report '97-'9

Victoria University of Technology

Appendix G

idix G

t

f r r r r

@

Moyes Delta Gliders Pty Ltd

Murphy Furniture Ry Ltd

Ocean Baits Australia Pty Ltd

Orford Pty Ltd

Paragon Medical Ltd

Parke Rotary Shears Australia Limited

Patrick Stevedores Holdings Ry Ltd

PsychMetrics Pty Ltd

Redmond Gary Australia Pty Ltd

Resin Coated Sand Pty Ltd

Risk & Reliability Associates Pty Ltd

Rofin Australia Pty Ltd

Romar Engineering Ry Ltd

Rosetta Laboratories Ry Ltd

Advanced hang glider with increased aerodynamic

performance:

New range of hospital furniture

Rock lobster bait based on terrestrial meat and/or hide

products including products derived from fishery and

abattoir waste

Experimental system for developing and improving

refrigeration systems

Two products designed to assist in the treatment of

liver cancer: a radioactive micro-particle that can be

injected and a novel method of using hyperthermia

to selectively heat cancerous tissue

Shredding machine utilising novel cutting equipment,

low power requirements and mobility

Retrofit straddle carrier with a navigation system

including integration of satellite positioning, inertial

and radar technologies to permit operational accuracy

to within 2 cm

Interactive database for occupational psychometric

instruments

Mobile lifter/borer to dig post holes and erect or

recover power poles

Integrated plant for the manufacture and recycling

of resin-coated sand used in the metalcasting industry

Interactive CD to demonstrate underlying risk & reliability

analysis techniques

Polymer fibre optic cable allowing greater light transmission

Rapid prototyping method for the rubber industry

Hardware/software system to transform a personal

computer into a high-performance wide-band

communications radio receiver suitable for high-end

spectrum monitoring and surveillance applications

131 650

100 000

449 310

85 000

950 000

322 000

1 000 000

697 000

484 350

2 3 1000

41 250

327 500

155 850

885 000

■ 30/06/98

3 0 /0 6 /9 9

31/12/2000

1 /0 6 /9 9

3 0 /09/9 8

2 8 /10/9 8

3 1 /10/9 9

31/01/2000

31/07/2000

University of NSW

University of Southern Queensland

University of Sydney

Royal Melbourne Institute of

Technology

■ ■ ■ ■

Appendix G

C

ollaborating partner

Department of Primary Industries

and Fisheries Tasmania

Appendix

ΓΓΤΤΊ" f Τ' f t t ! ! \ 1 f t t 1 1 Μ Ή f Η Μ 1

Amrad Operations Pty Ltd

Institute for Horticultural

Development

r m r r m r i m

Appendix G

T

ABLE G.6: SMALL COMPETITIVE GRANT AGREEMENTS SIGNED BY STATE, 1 9 9 7 -9 8

State

Victoria

New South Wales

Queensland

South Australia

Western Australia

Tasmania

Australian Capital Territory

Total

Note: No agreements were signed for the Northern Territory

Grant

commitment

--------- ($)

16 613 335

7 865 300

7 287 949

4 645 395

A 072 966

1 258 945

1 000 350

4 2 744 240

TABLE G.7: SMALL COMPETITIVE GRANT PAYMENTS, 1 9 9 7 -9 8

Organisation

A I Scientific Pty Ltd

Absolute Engineering Pty Limited

Acacia Research Pty Ltd

Access Dinghy Sailing Systems Pty Ltd

Acoustic Technologies Pty Ltd

Adacel Technologies Ltd

ADTEC International Pty Ltd

Advanced Systems Integration Pty Ltd

AMCOR Ltd

Amrad Operations Pty Ltd

APCS Pty Ltd

ARRB Transport Research Ltd

Associative Measurement Pty Ltd

ATA Scientific Pty Ltd

Atlantek Microsystems Pty Ltd

Atmospheric Radar Systems Pty Ltd

Australasian Butterfly Parks Pty Ltd

Australian Aquatic Technology Pty Ltd

Australian Centre for Water Quality Research

Australian Geophysical Surveys Pty Ltd

Australian Nuclear Science & Technology Organisation

Payment ($)

20 306

60 000

47 500

34 0 037

50 800

IR&D Board Annual Report '97-'98

T

ABLE G.7: (continued)

Organisation Payment ($)

Avalon Systems Pty Ltd

Aviation Data Systems (Australia) Pty Ltd

Bandell Pty Ltd

Barry Crommelin (Nominees) Pty Ltd

Benra Pty Ltd

Berty Technologies Pty Ltd

Biomolecutar Research Institute Ltd

Bioquest Ltd

Biron International Ltd

Bizpac (Australia) Pty Ltd

Black Forest Timbers Pty Ltd

Bosspak Pty Ltd

Botanical Resources Australia Pty Ltd

Brake Technologies Pty Ltd

Bret-tech Pty Ltd

Buderim Ginger Ltd

Burra Foods Australia Pty Ltd

CDS Pty Ltd

Central Queensland Mining Supplies Pty Ltd

Ceramic Fuel Cells Ltd

Charles Sturt University Riverina

CHK Engineering Pty Ltd

CICS Automation Pty Ltd

Circadian Technologies Ltd

Cleanleaf International Pty Ltd

Clearspan Pty Ltd

Clover Corporation Pty Ltd

Cochlear Limited

Colin Austin R&D Pty Ltd

Colloidal Dynamics Pty Ltd

Compri Technic Pty Ltd

Corporate Telephone Directories Pty Ltd

CSIRO Division of Building Construction and Engineering

CSIRO Division of Exploration and Mining

CSIRO Division of Fisheries

CSIRO Division of Food Science and Technology

107 300

63 000

19 000

45 000

12 418

347 700

247 8 0 0

1 1 8 6 1

100 000

30 500

Appendix G

TABLE G.7: (continued)

Organisation Payment ($)

CSIRO Division of Forest Products

CSIRO Division of Manufacturing Technology

CSIRO Division of Materials Science and Technology

CSIRO Division of Telecommunications and Industrial Physics

CSIRO Division of Wool Technology

CSIRO Molecular Science

CTAM Pty Ltd

Curtin University of Technology

Cutler Brands Pty Ltd

Dadanco Pty Ltd

Davies Craig Pty Ltd

Department of Primary Industries and Fisheries Tasmania

Department of Primary Industries Queensland

Diamond Composite Pty Ltd

Digital Studio Processing Pty Ltd

Dindima Group Pty Ltd

DJH Developments Pty Ltd

Dynamic Technology Pty Ltd

Eastbank Holdings Pty Ltd

Ecosol Pty Ltd

EDL Australia Pty Ltd

EduArt Multimedia Pty Ltd

Electrometals Mining Ltd

Energy Controls Pty Ltd

Engelhardt Eyewear Pty Ltd

Enman Pty Ltd

Equigen Consulting Pty Ltd

Eyre Enterprises Pty Ltd

F & M Norwood Nominees Pty Ltd

Factory Automation and Robotics Pty Ltd

Feature Press Library o f Australia Pty Ltd

Florigene Ltd

Fractal Graphics Pty Ltd

Fucell Pty Ltd

Furnishing Industry Association of Australia (Qld) Ltd

Future Fibre Technologies Pty Ltd

=

4 0 700

1 01 0 000

394 144

46 3 350

485 000

438 150

158 000

59 692

| 18 500

336 500

120 000

3 750

3 750

105 000

40 0 000

261 100

S 215 000

362 562

— — —

95 950

71 000 ■ " g y '- i - v u v ■ 1 0 1 9 0 0

3 000

25 920

\ 26 0 000

9 875

12 449

3 8 0 000

6 000

■■

183 800

201 900

120 000

52 900

SBB > ^ · *.·> 3 4 0 000

6 0 000

46 000

IR&D Board Annual Report '97-'98

Appendix G

TABLE G.7: (continued)

Organisation Payment ($)

Futuretech Electronics Pty Ltd

Garlic Australia Pty Ltd

GBC Scientific Equipment Pty Ltd

Genesis Software Pty Ltd

Geo2 Ltd

Godfrey Office Equipment Pty Ltd

Golden Circle Ltd

Goldschmied Pty Ltd

Griffith University

Gropep Pty Ltd

Ground Developments Pty Ltd

Groundswell Organics Tas Pty Ltd

Hi-Tech Automation (Aust) Pty Ltd

Huile Trading Company Pty Ltd

Hydranut Pty Ltd

Index Computer Solutions Pty Ltd

Industrial Automation Services Pty Ltd

Inertia Fire Systems

Infratech Systems & Services Pty Ltd

Institute for Horticultural Development

Institute of Drug Technology Australia Ltd

Isatech Pty Ltd

Ivy Industries

Jetflote Pty Ltd

Jindalee Fibre Developments Pty Ltd

Jobfit Occupational Medicine Pty Ltd

Justwin Technologies Pty Ltd

K J Ross Security Locks Pty Ltd

Kensway Pty Ltd

L Z Marketing Pty Ltd

La Trobe University

Leading Management Solutions Pty Ltd

Lejae Pty Ltd

Lewis Australia Pty Ltd

Lighting Sciences Australasia Pty Ltd

Linear NIR Technology Pty Ltd

183 OOO

370 900

103 200

73 000

10 000

12 375

^ 10 000

3 000

9 700

13 875

95 000

103 000

229 493

3 750

■

13 4 0 0

126 000

25 900

45 00 0

161 000

121 000

208 250

73 000

45 850

18 200

5 00 0

220 000

186 000

320 000

25 000

216 900

Appendix G

TABLE G.7: (continued)

Organisation

Lochard Pty Ltd

Macalister Research Farm Co-operative Ltd

Macquarie Research Ltd

Martial Armour Pty Ltd

Masstech Scientific Pty Ltd

M astersoft Research Pty Ltd :

Maxim Technology Pty Ltd

MaxTrak Technology Pty Ltd

McIntyre Precision Machinery Pty Ltd

Medical Innovations Ltd

Melbourne Information Technologies Australia Pty Ltd

Meta Consultants Pty Ltd

Micon Pty Ltd

Micron Technologies (Aust) Pty Ltd

Micronized Foods Pty Ltd

Mincad Systems Pty Ltd

Mine Remediation Services F*ty Ltd

Mine Site Technologies Pty Ltd

Monash University

Moyes Delta Gliders Pty Ltd

Multitrode Pty Ltd

Murphy Furniture Pty Ltd

Murrumbidgee Dairy Products Pty Ltd

MZC Glass Industries Pty Ltd

National Centre for Engineering in Agriculture

Neumann Associate Companies Pty Ltd

Newport Scientific Pty Ltd

Northfield Laboratories Pty Ltd

Nu Contacts Australia Pty Ltd

Nutrition Care Pharmaceuticals Pty Ltd

Ocean Baits Australia Pty Ltd

Open Directory Pty Ltd

Optiscan Pty Ltd

Orford Pty Ltd

Ozzmatic Screen Printing Machinery Pty Ltd

Pacific Knowledge Systems Pty Ltd

Payment ($)

47 000

18 500

755 000

146 000

7 350

414 000

23 600

235 000

95 000

322 000

75 000

12 700

50 000

105 840

44 900

9 500

310 000

23 510

199 500

119 050

67 091

3 000

18 500

7 000 g j l

5 000

19 350

26 172

842 000

74 200

18 500

205 600

121 000

28 000

3 000

10 000

100 000

IR&D Board Annual Report '97-'98

T

ABLE G.7: (continued)

t

Organisation

Papyrus Australia Pty Ltd

Paragon Medical Ltd

Parke Rotary Shears Australia Limited

Peter W Dawson and Associated Pty Ltd

Payment ($)

81000

342 300

322 000

145 500

Playquip Pty Ltd

PowerData Pty Ltd

PsychMetrics Pty Ltd

Quality Heat Treatment Pty Ltd

Queensland University of Technology

Quick Turn Circuits Pty Ltd

R M Williams Pty Ltd

Ranger Instruments Pty Ltd

Raytech Technologies Pty Ltd

Redmond Gary Australia Pty Ltd

Remedial Engineering Pty Ltd

Resin Coated Sand Pty Ltd

Rexport International (Aust) Pty Ltd

Rib Loc Australia Pty Ltd

Ridley Research & Development Corporation Pty Ltd

Risk & Reliability Associates Pty Ltd

RMD Electronics Pty Ltd

Rofin Australia Pty Ltd

Romar Engineering Pty Ltd

Rosetta Laboratories Pty Ltd

Rotary Heat Exchangers Pty Ltd

Rotec Design Pty Ltd

Rothtech Pty Ltd

Royal Melbourne Institute o f Technology

S M Collins Pty Ltd

S /E /E Corporation Ltd

Sastek Pty Ltd

166 000

57 418

55 750

120 000

27 750

4 625

34 355

85 000

35 000

177 000

5 000

250 000

9 250

19 993

42 600

189 000

45 500

180 500

31 000

105 000

270 350

85 325

28 400

154 600

428 000

Sausage Software (Holdings) Pty Ltd

Scan Optics Pty Ltd

Scantech Ltd

Schmidt Electronic Laboratories Pty Ltd

Scientec Research Pty Ltd

s 190 000

97 000

4 876

13 300

137 000

Appendix G

TABLE G.7: (continued)

Organisation Payment ($)R

Scientific & Industrial Electronics Network (SIEN)

Secure Network Solutions Ltd

SEME Holdings Pty Ltd

Shellfish Culture Ltd

Slamp Ltd

Solvents Australia Pty Ltd

Sonacom Pty Ltd

South Burnett Meat Works Co-Op Association Ltd

Southern Oil Refineries Pty Limited

Specterra Systems Pty Ltd

Stadt Industries Pty Ltd

STM Auto Pty Ltd

StrathAyr Pty Ltd

Sunshine Tropical Fruit Products Pty Ltd

Sutton Tools Pty Ltd

Swinburne University of Technology

Sydeston Pty Ltd

Sydney Water Board

Tanning Technologies Pty Ltd

Tetley Medical Ltd

Textor Metal Industries Pty Ltd

The Centre for Intelligent Information Processing Systems

The Excimer Laser Company Pty Ltd

The Flinders University of South Australia

The Smart Company Pty Ltd

Thew & McCann (Qld) Pty Ltd

Timber Promotion Council (TPC)

Time & People Australia Pty Ltd

Top Stairs & Staff Pty Ltd

Trace Scientific Ltd

Trekset (Aust) Tours Pty Ltd

Trio Communications 2 0 00 Pty Ltd

Triple P Enterprises

Turner Industries Pty Ltd

Tyrania Pty Ltd

University College of Southern Queensland

3 463

661 000

160 000

30 750

352 600

74 938

4 625

391 200

5 000

185 000

25 800

8 500

■■■■■■■■■■■■■■■■ 16 000

151 800

4 625

215 000

288 953

10 000

51150

13 875

27 900

219 500

65 000

9 250

30 125

150 000

16 875

190 000

548 000

1 250

IR&D Board Annual Report ’97-'98 j j j j )

TABLE G.7: (continued)

Organisation Payment ($)

University of New South Wales 2 1 4 90 0

University o f Queensland 6 3 3 4 0 0 E E

University of South Australia ^.■^SSSSSmmOU

7Q Π ΠΟΠ

University of Tasmania 9 475

University of Technology Sydney 107 8 2 0

University of Western Australia " ~ ~ i ϋ" - 1 550

University of Wollongong 67 400

9qo n o n sbssbw

Victoria University of Technology 10 0 0 0

Vision Control International Pty Ltd E S S I E S

w ^ , . r^, , . , 1 visor graphics rty Ltd U /o

go 000

VOS Industries Ltd 2 8 0 000

VRJ Risk Engineers Pty Ltd 129 00 0

Wagner Investments Pty Ltd 4 625

Wear Tough Pty Ltd

ORR Ron

168 0 0 0

Yeomans Plow Co Pty Ltd 5 0 (XX)

Yowie SnowShoes Pty Ltd ' , 2 200

YWCA of Australia

42 217

12 0 0 0

Total 3 2 727 646

L tfr \

Appendix G

TABLE G .l l : LARGE COMPETITIVE GRANT AGREEMENTS SIGNED, 1 9 9 7 -9 8

Applicant

Advanced Technical Research Organisation Pty Ltd

ANCA Pty Ltd

Biotech Aust Pty Ltd

BresaGen Limited

Casttikulm Research Pty Ltd

CEA Research and Development Pty Ltd

Cervax Pty Ltd

Chip Application Technologies Ltd

Codecs Australia Pty Ltd

Creative Bottle Decorators Pty Ltd

Elastomedic Pty Ltd

Energy Storage Systems Pty Ltd

Execom Software Pty Ltd

Fairlight ESP Pty Ltd

Farley Cutting Systems Pty Ltd

ForBio Research Pty Ltd

GeneType Pty Ltd

GroPep Pty Ltd

Intellect Holdings Ltd

Invent Engineering Pty Ltd

R&D activity Maximum

Grant

provided

( $ )

Automatic train health monitoring system

3DX computer numerical control (CNC)

PAI-2 new therapeutic agent

Novel biotherapeutics for cancer treatment

TT compressor

The CEA'Illuminator project

Cervical cancer therapeutic

Multiple card acceptance device (CAD) for contact and contactless

smart cards and magnetic stripe cards in multi-application systems

Development of vaccine to prevent Otitis Media

Glass bottle colouring process

Novel polymers component fabrication technology and product

development for medical devices

Commercialisation of Supercapacitor technology

Natural evolution — automated product development

Integrated digital audio solutions for film TV and music production

Integrated operator support diagnostics and service system

Automation for DNA preparation for genetic analysis

HLA Gene Complex Haplotyplng project

Clinical development of milk-derived growth promoting agents for the

treatment of chronic wounds

Smart-card-based secure personal payment systems development —

new direciions in electronic commerce

Further development of new type of diesel fuel injection system

949 740

2 873 474

3 762 500

2 929 500

1 750 000

2 951 943

5 795 114

1 248 642

2 166 750

1 610 000

2 257 300

2 199 535

1 078 684

2 040 166

2 385 900

1 574 990

3 500 000

1 7 7 2 840

4 125 000

4 670 000

Intended

date of

completion

iy||||iyjj

II

30/03/00

30/06/00

14/04/99

aliliiifillilH

31/12/00

2/03/00

30/06/99

30/12/00

HHIHI

W iii/i» - 1

31/12/98

3 1 /0 3 /φ

30/11/99

31/12/98

24/12/99

30/06/00

31/12/99

31/01/01’

30/09/00,

30/06/99

3 0 /06/0 0

IR&D Board Annual Report '97-’9l

TABLE G .U : (continued)

Applicant R&D activity

Maximum

Grant

provided

( $ )

--- —------- ------- -— ------------------

The stackable telephone exchange 13 000 000

Ultraclean coal 7 487 000

Coronary bypass prosthesis > ' i s 1 6 1 0 000

Implanted rotary blood pump for chronic heart failure 3 235 138

Silicon carbide manufacturing process 958 000

Development of organo-peptide insecticides 1 716 918

R&D of extruded plastic materials and production processes for the 4 973 262

manufacture of automotive parts and accessories

Research into resonance problems of ship motions and development 843 500

of berth and transhipment warning systems

Electronic software distribution (ESD) 2 764 514

GMDP — a novel therapy to reduce infection 2 280 000

Self-adjusting systems for ventilatory assistance 2 600 000

Ultra-fine gold extraction technology 1 242 376

Multimedia communication centre 2 918 440

Development of a multimedia and GSM mobile core billing system 2 926 000

Development of high-frequency NMR probes 2 336 000

Seam weld draw mill 1 000 000

Development of novel Dendrimer compounds as pharmaceuticals 2 694 000

Innovative concept for small office communications with computer- 1 448 315

integrated telephony

UCELNET — underground cellular network communications systems 2 245 500

109 921 041

Intended

date of

completion

----------------— ......... — ■ — -----------

1/08/00

30/04/01

30/06/99

31/12/00

30/09/99

31/03/00

30/06/00

15/05/01

31/12/99

31/12/98

31/12/99

31/12/99

1/02/00

30/11/99

30/09/99

31/12/99

31/03/00

20/09/98

31/12/98

§

Jtec Pty Ltd

Kerstream Pty Ltd

KRYOCOR Pty Ltd

Micromedical Industries Ltd

Minerals Corporation Ltd

Nufarm Limited

Oakmoore Pty Ltd

O'Brien Maritime Consultants Pty Ltd

Open Software Associates Limited

Peptech Limited

ResMed Ltd

Resource Trend Research Pty Ltd

Scitec Limited

Software Associates Pty Ltd (SWA)

Spin Systems Pty Ltd

Stainless Tube Mills Pty Ltd

Starpharma Ltd

Tennyson Technologies Pty Ltd

Transcom Communication Systems Ltd

Total

Appendix G

A

ppendix G

TABLE G .l2: LARGE COMPETITIVE GRANT AGREEMENTS SIGNED BY STATE, 1 9 9 7 -9 8

Grant

State Number

commitment

($)

New South Wales 14 49 589 959

sHMHHHHHHMM

Victoria 12 28 381 735

Western Australia 5 10 565 674

Queensland 4 12 119 390

South Australia β κ 3 6 312 340

Australian Capital Territory 1 2 9 5 1 943

Total 41 1 0 9 9 2 1 0 4 1

Note: No agreements were signed for the Northern Territory or Tasmania

TABLE G.13: LARGE COMPETITIVE GRANT PAYMENTS, 1 9 9 7 -9 8

Organisation Payment ($)

Advanced Technical Research Organisation Pty Ltd 279 996

AE Bishop Research Pty Ltd 6 5 0 711

ANCA Pty Ltd 1 0 3 8 098

Biotech Aust Pty Ltd 1 762 437

BresaGen Limited 306 755

Casttikulm Research Pty Ltd 1 47 4 201

CEA Research and Development Pty Ltd 538 391

Cervax Pty Ltd 1 6 5 6 643

Chip Application Technologies Ltd 621 9 4 9

Compumedics Pty Ltd 369 304

Cortecs Australia Pty Ltd 566 736

Creative Bottle Decorators Pty Ltd 1 45 4 800

Cutting Edge Technology Pty Ltd 3 780 500

Elastomedic Pty Ltd 119 450

Energy Storage Systems Pty Ltd 355 092

Execom Software Pty Ltd 703 238

Fairlight ESP Pty Ltd 1 1 8 4 250

Farley Cutting Systems Pty Ltd 495 757

ForBio Research Pty Ltd 709 524

GeneType Pty Ltd 62 4 000

GroPep Pty Ltd 300 322

Intec Copper Pty Ltd 2 790 125

Appendix G

A

ppendix G

TABLE G.13: (continued)

Organisation Payment ($)

Intellect Holdings Ltd

Invent Engineering Pty Ltd 4 0 5 958

Jtec Pty Ltd

Kerstream Pty Ltd

KRYOCOR Pty Ltd

Lake DSP Pty Ltd

Micromedical Industries Ltd

Micronisers Pty Ltd

Mine Site Technologies Pty Ltd

2 959 926

127 00 0

386 559

366 882

26 3 887

586 000

Minerals Corporation Ltd

Neomedix Systems Pty Ltd

Nufarm Limited

183 500

5 7 8 157

555 875

Oakmoore Pty Ltd

Open Software Associates Limited

1 8 9 6 664

91 8 815

Pavement Technology Ltd

Peptech Limited

902 250

1 51 0 500

Quantum Technology Pty Ltd

ResMed Ltd

3 5 0 8 2 0

6 6 2 000

Resource Trend Research Pty Ltd 2 9 2 968

Scitec Limited 6 4 2 062

Software Associates Pty Ltd (SWA)

Spin Systems Pty Ltd

Stainless Tube Mills Pty Ltd

Starpharma Ltd

6 3 0 000

1 114 061

24 1 476

1 38 1 046

Tennyson Technologies Pty Ltd 1 37 5 900

Transcom Communication Systems Ltd 9 1 2 049

World Geoscience Corporation 2 6 7 0 421

Total 4 7 2 7 6 841

IR&D Board Annual Report '97-'98

A

ppendix G

TABLE G.14: LARGE COMPETITIVE GRANT PAYMENTS BY STATE, 1 9 9 7 -9 8

State or Territory

fc: New South Wales Victoria

Western Australia

Queensland

South Australia

Australian Capital Territory

Total

Amount s

m m m m 8 712 227

7 7 6 4 636

2 9 6 4 127

5 3 8 391

% of Total

34.25

23.49

18.43

16.42

6.27

1.14

100.00

Note: There were no payments to the Northern Territory or Tasmania

Appendix G

A

ppendix Η

DISCRETIONARY GRANTS SCHEME

TABLE H .l: DISCRETIONARY GRANT PAYMENTS, 1 9 9 7 -9 8

TABLE H.2: DISCRETIONARY GRANT PAYMENTS BY STATE OR TERRITORY, 1 9 9 7 -9 8

State or Territory

Queensland

New South Wales

Total

Note: There were no payments to the Australian Capital Territory, the Northern Territory, South

Australia. Tasmania. Victoria or Western Australia

IR&D Board Annual Report '97- 98

A

ppendix I

GENERIC TECHNOLOGIES GRANTS SCHEME

TABLE 1.1: GENERIC TECHNOLOGY GRANT PAYMENTS, 1 9 9 7 -9 8

Organisation

CS1R0 Division o f Manufacturing Technology

CSIRO Division of Mineral Products

Pacific Power

Queensland University o f Technology

University of Melbourne

University of Queensland

University of Technology Sydney

Total

6 8 300

y r inmr n nwma-niin· ! ^ ^

TABLE 1.2: GENERIC TECHNOLOGY GRANT PAYMENTS BY STATE OR TERRITORY, 1 9 9 7 -9 8

State or Territory

Queensland

Victoria

New South Wales

Total

158 269

BS''"' ■ ■

71 Q4Q

% of Total

58.36

26.53

15.11

100.00

Note: There were no payments to the Australian Capital Territory, the Northern Territory. South

Australia. Tasmania or Western Australia

^ Appendix I

A

ppendix K

;

Appendix K

NATIONAL TEACHING COMPANY SCHEME

TABLE K l: NATIONAL TEACHING COMPANY SCHEME GRANT PAYMENTS, 1 9 9 7 -9 8

Organisation

Jakab Industries Australia Pty Ltd

Neutron Probe Services Pty Ltd

University of New South Wales

University of Western Sydney

Total

TABLE K.2: NATIONAL TEACHING COMPANY SCHEME GRANT PAYMENTS BY STATE OR TERRITORY, 1 9 9 7 -9 8

Note: There were no payments for the Australian Capital Territory, the Northern Territory,

Queensland, South Australia, Tasmania, Victoria or Western Australia

Appendix K

Appendix L

Appendix L

ADDRESSES ............. ..- Ξ Ξ Ξ γ Ι

Annual Report Information Officer

Telephone Facsimile

Assistant Manager, Anita Scandia 02 6 2 13 6 0 00 0 2 62 13 7677

IR&D Board Secretariat

Office of Auslndustry

Level 5, 3 3 Allara Street

Canberra ACT 2601

The Industry Research and Development Board may be contacted through the

Commonwealth Department of Industry, Science and Resources at the following

addresses:

For correspondence Industry Research and Development Board GPO Box 2704

Canberra City ACT 2601

Or as follows:

Office of Auslndustry

Department o f Industry, Science

and Resources

20 Allara Street

Canberra City ACT 26 00

New South Wales

Level 17

The Maritime Centre

207 Kent Street

Sydney NSW 2 0 00 02 9256 0 9 00 0 2 92 52 3652

Victoria

9th Floor

161 Collins Street

Melbourne Vic 30 00 03 92 68 7555 03 9268 7599

IR&D Board Annual Report '97-'98

Telephone Facsimile

02 62 1 3 6 0 0 0 02 6213 7000

A

ppendix L

Queensland Telephone Facsimile

12th Floor

Santos House

60 Edward Street

Brisbane Qld 4 0 0 0 07 3 2 3 1 5 1 1 1 07 3229 0017

South Australia

11th Floor

Terrace Towers

1 7 8 North Terrace

Adelaide SA 5 0 0 0 0 8 8 4 0 6 4 7 0 0 08 8 4 06 4717

Western Australia

8th Floor

Griffin Centre

2 8 The Esplanade

Perth WA 6 0 0 0 08 9 3 27 9 5 0 0 08 9327 9520

Tasmania

4th Floor

AMP Building

8 6 Collins Street

Hobart TAS 7 0 0 0 03 6 2 3 4 1 5 88 0 3 6 2 34 1646

Northern Territory

Office of Auslndustry

Departm ent o f Industry, Science

and Resources

20 Allara Street

Canberra City ACT 2 6 00 02 6 2 1 3 6 0 0 0 02 6 2 13 7000

The postal address of th e D e p a rtm e n t of Industry, S cience and

Resources in each of th e above capital cities is as follows:

GPO Box 9839: Capital cities other than Melbourne

GPO Box 85A: Melbourne only

Web site: www.ausindustry.gov.au/

Appendix L

A

lphabetical Index Page numbers in italics indicate an appendix

A Acting Chairman, introduction, 1

addresses, 16061(A)

Administrative Appeals Tribunal (AAT), 27, 28, 91(A) advertising, 53, 54

Auslndustry delegation, 14 Hotline, 15, 54 Office of, 24, 25, 26, 34, 45, 47, 49, 50, 52, 129(A) state offices, 14(n), 18

Australian Industry Research and Development Incentives Scheme (AIRDIS) Board, 5

Australian Greenhouse Office (AGO), 49

Australian Taxation Office (ATO) administration of R&D Tax Concession Scheme, 14,18, 22, 24, 26, 129(A)

B Biological Committee, 6, 21, 34, 36-38 meetings, 38 membership, 59(A)

Board (IR&D) 2,-15, 20-23, 45 delegation, 14 functions, 5, 20 meetings, 23 membership, 4, 8-11, 21, 5556(A) powers, 21 programs, 12-15, 20 role, 4, 20, 45

Secretariat, 22, 82(A), 83(A), 85(A) structure, 6, 21

business investment in R&D, 1, 2,4 expenditure on R&D, 3, 5, 7,12, 14, 17

c case studies, 53

CEA Technologies, 19

cochlear implant, 1, 18

committees see Biological Committee; Engineering and Manufacturing Committee; Information Technology and Telecommunications (IT&T) Committee;

Innovation Investment Fund (IIF); R&D Start Committee; R&D Tax Concession Committee

Commonwealth Development Bank, 18, 22, 33, 40

communications strategy, 50, 53

Competitive Grants Program, 13555(A)

concessional loans, 13, 18, 33, 34, 36, 40, 42, 13532(A)

conflict of interest, rules and procedures, 22, 46, 8486(A)

consultancies, 54

Core Start, 1814, 18, 34-35, 50

D Department of Industry, Science and Tourism, 14(n), 22, 28, 34, 63(A), 71(A), 83(A), 84(A)

state offices, 14(n), 22

Discretionary Grants Scheme, 156(A)

E Engineering and Manufacturing Committee, 6, 21. 34, 3841 meetings, 39

membership, 60(A)

equity capital, see also venture capital, 12, 14, 45

F Fairlight ESP, 16

Federal Court, 27, 28, 31, 91(A)

focus group testing, 53, 54

Freedom of Information, 91(A)

Fund Management Committee, see Innovation Investment Fund

IR&D Board Annual Report '97-'98

G g

ene shears, 1

Generic Technology Grants Scheme, 157(A)

globalisation, 1,1 6

government expenditure on R&D, 3,1 2, 14

graduate-based R&D-related projects, 13, 33, 34, 79(A)

I

Income Tax Assessment Act 1936, 27

industry executive briefings, 52 case studies, 53

Industry Research and Development Act 1986, v, 4, 20, 21, 27, 62(A), 63(A), 78(A), 81(A), 82(A), 83(A), 84(A), 93(n), 100(A)

information requests, 15

Information Technology and Telecommunications (IT&T) Committee, 6, 21, 34, 42-44 meetings, 44

membership, 59(A)

Innovation Investment Fund (IIF), 6, 12, 14, 18, 20, 21, 45-49, 50, 62(A), 63(A), 64(A) meetings, 49

membership, 46, 61(A)

InterScan aircraft landing system, 1

Investing for Growth, 13, 26, 48

IR&D Board, see Board (IR&D)

L laser technology, 17, 31

legislation, 14(n), 20, 22, 24, 25, 26-27, 28,

31

letter of transmittal, v

litigation, 28

M marketing, 29, 32, 52-53

Ministerial Directions, 47, 62-83(A)

Mission Statement, vi

More Time for Business, 45

N National Procurement Development Program, 158(A)

National Teaching Company Scheme, 159(A)

Norseld, 17

o Official Directions, Declarations and Appointments, 62-83(A)

P programs, see Board (IR&D)

R R&D Start Committee, 6, 21, 22, 35-36 meetings, 35 membership, 58(A)

R&D Start program, 6, 7, 12-13, 18, 19, 20, 21, 32-44, 50, 7880(A), 81(A) collaborative R&D projects, 33, 34 concessional loans, 13, 18, 33, 34, 130-

32(A) Core Start, 13-14,18, 34-35, 50 graduate-based R&D-related projects, 13, 33, 34, 79(A)

R&D Projects in SMEs, 32-33, 34 Start Plus, 14, 18, 33-34, 50 Start Premium, 14, 18, 34, 50

R&D Tax Concession Committee, 6, 21, 24, 25, 28, 91(A), 129(A) meetings, 25, 28 membership, 57(A) seminars, conferences and workshops,

25

R&D Tax Concession Scheme, 6, 7 ,1 2 ,14­ 1 5 ,18, 20, 22, 24-31, 92-129(A)

R

(cont) Registered Research Agencies, 15, 92(A), 93(n), 100(A), 101-26(A)

Renewable Energy Equity Fund (REEF), 14, 48

Renewable Energy Innovation Investment Fund, 14, 48

research & development, 16-19 assessor training scheme, 26 business investment in, 1, 2,4 commercialisation, 1, 2, 4, 6,1 2 ,1 3 , 16, 17, 22,27, 28-30, 32, 33, 34, 40, 45, 46, 50, 64(A), 68(A), 69(A), 79(A) definition, 24, 26-27, 63(A)

expenditure business, 3, 5, 7, 12, 14,17 domestic, 3 ,1 2 higher education, 3,1 2 government, 3 ,1 2 ,1 4 international, 3 ,1 2 ,1 7 syndicates, 24, 28-30, 127(A), 128-29(A)

risk management, 26, 47, 52

s Safeguarding the Future: Australia's Response to Climate Change, 48 Sencon Environmental Systems, 30

staffing support staff, 87-88(A)

Start Plus, 14, 18, 33-34, 50

Start Premium, 14,18, 34, 50

strategic planning, 50-52

Strathayr Pty Ltd, 19

Supreme Court, 91(A)

T Tax Concession Committee (TTC), see R&D Tax Concession Committee

taxation concessions for R&D, see also R&D Tax Concession Scheme, 7,14-15, 20, 24-31

u UNISYS case, 27-28

V venture capital, see also equity capital, 12, 14, 18, 45, 47, 64(A), 66(A)

VESDA, 31

Vision, vii

wWestern Australian Specialty Alloys (WASA) Pty Ltd, 19

IR&D Board Annual Report '97-’98

TH

E PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY PAPER No. 225 of 1998 ORDERED TO BE PRINTED

ISSN 0727-4181

Cat No. 98 0758 1