Australian companies will become more innovative and globally competitive thanks to the new R&D tax incentive, says the Minister for Innovation and Industry, Senator Kim Carr.
Senator Carr said the Government’s $1.8 billion R&D Tax Credit would deliver more funding to innovative firms – including manufacturers, ICT and biotech – increasing productivity and Australia’s national income.
“This builds on Labor’s policy reform agenda of the past four years and will be a major benefit for businesses that innovate and use R&D as a platform for future growth, Senator Carr said.
With the support of crossbench Senators the new legislation is expected to pass through Parliament before the end of the month. The new laws will take effect from July 1.
Under the new legislation more funds will be provided for “genuine” R&D deserving of public support, Senator Carr said.
“This is good news for industry and better value for taxpayers,” he said.
It will deliver a 45 per cent refundable tax credit to companies with an aggregated turnover of less than $20 million and a 40 per cent non-refundable offset to all others.
“This will allow more firms to benefit from our massive boost to the innovation, science and research budget, helping them grasp the opportunities of our transition to a cleaner economy, said Senator Carr.
Following discussions with the Greens, the Government will introduce quarterly payments for small and medium businesses from January 1, 2014.
These firms will get their credit sooner, significantly improving their cash flow and incentive to invest in R&D.
Senator Carr said the deferral of the start date to July 1 this year had an overall impact of $40m, with a negative impact of $310m in 2011-12 and a positive impact in 2012-13 of $270m.
“The Government will continue to work in partnership with the business community to get the most from this landmark reform,” Senator Carr said.
“An advisory group will be established through the Innovation Australia Board to monitor the implementation and operation of the Credit.
“The Government, through AusIndustry, will run an extensive education program to ensure firms are kept up to date.”