Industry continues to be driven by innovation says Senator Carr

12 Sep '07

3 min read

"We must build a culture of innovation, where backing new ideas is the rule rather than the exception.” Labor promised to end the fragmentation and duplication of Commonwealth and State programs of industry assistance in innovation.

A promise to look harder at the current arrangements for the R&D Tax Concession, with a view to developing a much more effective scheme was welcomed. There is no doubt that the Government's cuts to the tax concession in 1996 were damaging to Australian industry across the board.

Commonwealth support for R&D under the basic tax concession was worth 18¢ in the dollar 11 years ago; now it is worth 7.5¢ in the dollar. As a result, in manufacturing, R&D spending went backwards for four years in a row.

Wes Taylor, Advocacy Officer for the TTNA, is of the view that the current R&D Tax Concession is hardly worth the effort. “Starting with the premise that R&D is vital to innovation and vital to the long-term prosperity of individual companies and the Australian economy, the current program falls short of useful for small to medium sized companies,” Mr. Taylor stated.

Whilst the senator claimed the R&D tax concession was “critical”, he wouldn't be drawn on specifics, informing the conference that Labor is looking hard at the current arrangements with a view to developing something better.

“We must change attitudes to this crucial part of business development, and we believe that the tax concession — while it cannot be a stand-alone policy - is a key part of the suite of mutually reinforcing policies that will do this.” One option cited is that companies investing more than 1 per cent of turnover in R&D would qualify for a higher concession.

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