‘Australia 2030: prosperity through innovation’ report released
Last week saw the much anticipated release of the ‘Australia 2030: prosperity through innovation’ report, an Innovation and Science Australia delivered roadmap to advise the Australian government in developing a strategic plan for the Australian innovation, science and research system to 2030.
The 2030 Plan is made up of three key sections:
- Section A explains the vision, need and opportunity for Australia to improve its innovation and science performance by 2030
- Section B identifies with five key policy imperatives for action where government can catalyse more investment and activity, (education, industry, government, research and development, and culture and ambition) and puts forward 30 recommendations based on these imperatives
- Section C proposes a roadmap for implementation of the plan and includes a complete summary of the recommendations
The research and development (R&D) sector features strongly in the report forming its own innovation system imperative as well as being included in the industry imperative. A key feature of the plan is to use strategic activity and investment by governments to encourage increased R&D funding from non-government sources, thereby keeping government R&D expenditure at its current level of 0.63% of GDP. The report highlights that Australia is fairly unique among developed nations in that the vast majority (87%) of government funding for business R&D comes via ‘indirect’ funding measures (i.e. the R&D Tax Incentive) with only a small percentage coming through direct grant programmes.
Of particular interest to the R&D community are the following recommendations:
- Implement all recommendations of the 2016 Review of the R&D Tax Incentive (click here for summary), with the following adjustments:
- Adjust the cap of the annual cash refund payable to $4 million and introduce a maximum cumulative refund of $40 million per company
- Set the intensity threshold at 1% of total annual expenditure, such that all R&D expenditure is claimable (subject to other limits) once the trigger level is reached
- Prioritise new and redirected investment in stimulating business R&D to programs that directly support activity in areas of competitive strength and strategic priority (e.g. Cooperative Research Centres – CRCs, CRC Projects, Entrepreneurs’ Programme and Industry Growth Sectors)
- Introduce a collaboration premium of up to 20% on non-refundable tax offset to incentivise collaboration (as per the recommendation put forward in the Review of the R&D Tax Incentive)
- Increase funding for the Export Market Development Grant (EMDG) programme and investigate how to direct a larger proportion of funds to high growth businesses
The report is now with the government who will respond in due course. We are yet to receive a formal response to the Review of the R&D Tax Incentive, so it is likely this will be folded into the response to the 2030 Plan. In the meantime, if you would like to discuss the report, possible R&D Tax Incentive or EMDG claims, or your eligibility for direct grant programmes such as Accelerating Commercialisation, please contact BSI Innovation on 02 9126 9100 or via email at email@example.com