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175% R&D tax concession may exclude 90% of research projects.

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Senator Natasha Stott Despoja Deputy Parliamentary Leader and Senator for South Australia Australian Democrats spokesperson for Science and Information Technology

Press Release Dated: 4 Feb 2001 Press Release Number: 01/52 Portfolio: Science and Information Technology

Related: Education

175% R&D tax concession may exclude 90% of research projects Eligibility criteria for the Government’s proposed new 175% R&D tax concession is likely to exclude 90% of projects that currently qualify, according to the Australian Democrats.

Senator Natasha Stott Despoja, Australian Democrats’ Science and Technology spokesperson, said “The Government has dropped the ball on R&D tax concessions. The changes outlined in the government’s innovation strategy will strangle the already unacceptably low levels of private R&D investment.

“The Democrats are concerned about how narrowly the Government defines the criteria for the R&D concession. Currently, eligible projects must demonstrate they are ‘innovative’ or have ‘high technical risk’. The new proposal requires that projects will now need to meet both these tests.

“The Democrats estimate that as few as 10% of currently eligible R&D projects will meet both tests. Far from enhancing business investment in R&D, this policy will devastate such activities and lead to a serious contraction of eligible companies and projects.

“This policy is further exacerbated by the Government’s intention to exclude supporting activities such as market research, testing of new products, quality control and standards compliance from the definition of R&D. These supporting activities often represent up to 90% of the cost of an R&D project and are crucial to the success of R&D.

“This policy is a proxy for picking winners in a very narrow range of new technology R&D projects. There is no incentive for business to invest in R&D in areas that do not involve high technology transfer.

“These including resource management, mature manufacturing industries and areas that require high inputs of social science, management and humanities based research.

“New technology must be supported but a broad base of R&D activities is essential for an innovative society.

“It is hard to conceive of a proposal less likely to enhance business R&D.

“It is hard to see how legislation with these effects could be supported by the Democrats. The Government needs to re-think its policy”, concluded Senator Stott Despoja.


Top | Email | Tell us what you think Authorised by: Jim Downey, 10 Brisbane Avenue, Barton ACT 2604. Copyright © 2001 Australian Democrats Last modified: Thu, 18 May 2000 13:51:26 Today: Mon, 05 Feb 2001 08:44:26